Edgar Filing: AMERICAN TOWER CORP /MA/

10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One):

x Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the fiscal year ended December 31, 2014

¨ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the transition period from to

Commission File Number: 001-14195

American Tower Corporation

(Exact name of registrant as specified in its charter)

Delaware

65-0723837

(State or other jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

116 Huntington Avenue

Boston, Massachusetts 02116

(Address of principal executive offices)

Telephone Number (617) 375-7500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each Class		Name of exchange on which registered
Common Stock, $0.01 par value		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well known seasoned issuer, as defined in Rule 405 of the Securities Act: Yes x No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act: Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of the Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):


Large accelerated filer x		Accelerated filer ¨		Non-accelerated filer ¨		Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): Yes ¨ No x

The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant as of June 30, 2014 was approximately $35.3 billion, based on the closing price of the registrant’s common stock as reported on the New York Stock Exchange as of the last business day of the registrant’s most recently completed second quarter.

As of February 13, 2015, there were 396,708,636 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive proxy statement (the “Definitive Proxy Statement”) to be filed with the Securities and Exchange Commission relative to the Company’s 2015 Annual Meeting of Stockholders are incorporated by reference into Part III of this Report.

AMERICAN TOWER CORPORATION

TABLE OF CONTENTS

FORM 10-K ANNUAL REPORT

FISCAL YEAR ENDED DECEMBER 31, 2014


		Page
Special Note Regarding Forward-Looking Statements			ii
PART I
ITEM 1.	Business		1
	Overview		1
	Products and Services		2
	Strategy		4
	Recent Transactions		6
	Regulatory Matters		7
	Competition		9
	Customer Demand		9
	Employees		10
	Available Information		10
ITEM 1A.	Risk Factors		11
ITEM 1B.	Unresolved Staff Comments		20
ITEM 2.	Properties		21
ITEM 3.	Legal Proceedings		23
ITEM 4.	Mine Safety Disclosures		23
PART II
ITEM 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		24
	Dividends		24
	Performance Graph		25
ITEM 6.	Selected Financial Data		26
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		28
	Executive Overview		28
	Non-GAAP Financial Measures		32
	Results of Operations: Years Ended December 31, 2014 and 2013		33
	Results of Operations: Years Ended December 31, 2013 and 2012		39
	Liquidity and Capital Resources		46
	Critical Accounting Policies and Estimates		60
	Accounting Standards Updates		63
ITEM 7A.	Quantitative and Qualitative Disclosures About Market Risk		64
ITEM 8.	Financial Statements and Supplementary Data		65
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		65

AMERICAN TOWER CORPORATION

TABLE OF CONTENTS—(Continued)

FORM 10-K ANNUAL REPORT

FISCAL YEAR ENDED DECEMBER 31, 2014


		Page
ITEM 9A.	Controls and Procedures		65
	Disclosure Controls and Procedures		65
	Management’s Annual Report on Internal Control over Financial Reporting		66
	Changes in Internal Control over Financial Reporting		66
	Report of Independent Registered Public Accounting Firm		67
PART III
ITEM 10.	Directors, Executive Officers and Corporate Governance		68
ITEM 11.	Executive Compensation		70
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		70
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence		70
ITEM 14.	Principal Accounting Fees and Services		70
PART IV
ITEM 15.	Exhibits, Financial Statement Schedules		71
Signatures			72
Index to Consolidated Financial Statements			F-1
Index to Exhibits			EX-1

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains statements about future events and expectations, or forward-looking statements, all of which are inherently uncertain. We have based those forward-looking statements on our current expectations and projections about future results. When we use words such as “anticipates,” “intends,” “plans,” “believes,” “estimates,” “expects” or similar expressions, we do so to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements we make regarding the Proposed Verizon Transaction (as defined in this Annual Report), future prospects of growth in the communications site leasing industry, the effects of consolidation among companies in our industry and among our tenants and other competitive pressures, the level of future expenditures by companies in this industry and other trends in this industry, changes in zoning, tax and other laws and regulations, economic, political and other events, particularly those relating to our international operations, our substantial leverage and debt service obligations, our future financing transactions, our plans to fund our future liquidity needs, our ability to maintain or increase our market share, our future operating results, our ability to remain qualified for taxation as a real estate investment trust (“REIT”), the amount and timing of any future distributions including those we are required to make as a REIT, our future capital expenditure levels, our ability to protect our rights to the land under our towers and natural disasters and similar events. These statements are based on our management’s beliefs and assumptions, which in turn are based on currently available information. These assumptions could prove inaccurate. These forward-looking statements may be found under the captions “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as in this Annual Report generally.

You should keep in mind that any forward-looking statement we make in this Annual Report or elsewhere speaks only as of the date on which we make it. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. In any event, these and other important factors, including those set forth in Item 1A of this Annual Report under the caption “Risk Factors,” may cause actual results to differ materially from those indicated by our forward-looking statements. We have no duty and do not intend to update or revise the forward-looking statements we make in this Annual Report, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that the future events or circumstances described in any forward-looking statement we make in this Annual Report or elsewhere might not occur. References in this Annual Report to “we,” “our” and the “Company” refer to American Tower Corporation and its predecessor, as applicable, individually and collectively with its subsidiaries as the context requires.

iii

PART I

ITEM 1. BUSINESS

Overview

Our communications real estate portfolio of 75,594 communications sites, as of December 31, 2014, includes 28,566 communications towers domestically, 46,598 communications towers internationally and 430 distributed antenna system (“DAS”) networks, which provide seamless coverage solutions in certain in-building and outdoor wireless environments. Our portfolio primarily consists of towers that we own and towers that we operate pursuant to long-term lease arrangements. In addition to the communications sites in our portfolio, we manage rooftop and tower sites for property owners under various contractual arrangements. We also hold property interests that we lease to communications service providers and third-party tower operators.

American Tower Corporation was originally created as a subsidiary of American Radio Systems Corporation in 1995 and was spun off into a free-standing public company in 1998. Since inception, we have grown our communications real estate portfolio through acquisitions, long-term lease arrangements and site development. We are a holding company and conduct our operations through our directly and indirectly owned subsidiaries and joint ventures. Our principal domestic operating subsidiaries are American Towers LLC and SpectraSite Communications, LLC. We conduct our international operations primarily through our subsidiary, American Tower International, Inc., which in turn conducts operations through its various international holding and operating subsidiaries and joint ventures.

On February 5, 2015, we signed a definitive agreement with Verizon Communications, Inc. (“Verizon”) pursuant to which we expect to acquire the exclusive right to lease, acquire or otherwise operate and manage up to 11,489 wireless communications sites for $5.056 billion in cash at closing (the “Proposed Verizon Transaction”), subject to certain conditions and limited adjustments.

We operate as a REIT and therefore are generally not subject to U.S. federal income taxes on our income and gains that we distribute to our stockholders, including the income derived from leasing space on our towers. However, even as a REIT, we remain obligated to pay income taxes on earnings from our taxable REIT subsidiaries (“TRSs”). In addition, our international assets and operations, including those designated as direct or indirect qualified REIT subsidiaries or other disregarded entities of a REIT (collectively, “QRSs”), continue to be subject to taxation in the foreign jurisdictions where those assets are held or those operations are conducted.

The use of TRSs enables us to continue to engage in certain businesses while complying with REIT qualification requirements. We may, from time to time, change the election of previously designated TRSs to be treated as QRSs, and may reorganize and transfer certain assets or operations from our TRSs to other subsidiaries, including QRSs. During the year ended December 31, 2014, we restructured certain of our German subsidiaries and certain of our domestic TRSs, which included a portion of our network development services segment and indoor DAS networks business, to be treated as QRSs. As a result, as of December 31, 2014, our QRSs include our domestic tower leasing business, most of our operations in Costa Rica, Germany and Mexico and a portion of our network development services segment and indoor DAS networks business.

Our continuing operations are reported in three segments: (i) domestic rental and management, (ii) international rental and management and (iii) network development services. For more information about our

business segments, as well as financial information about the geographic areas in which we operate, see Item 7 of this Annual Report under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and note 21 to our consolidated financial statements included in this Annual Report.

Products and Services

Rental and Management Operations

Our rental and management operations accounted for approximately 98%, 98% and 97% of our total revenues for the years ended December 31, 2014, 2013 and 2012, respectively. Our revenue is primarily generated from tenant leases. Our tenants lease space on our communications real estate, where they install and maintain their individual communications network equipment. Rental payments vary considerably depending upon numerous factors, including, but not limited to, tower location, amount and type of tenant equipment on the tower, ground space required by the tenant and remaining tower capacity. Our tenant leases are typically non-cancellable and have annual rent escalations. Our primary costs typically include ground rent (which is primarily fixed, with annual cost escalations) and power and fuel costs, some of which may be passed through to our tenants, as well as property taxes and repairs and maintenance. Our rental and management operations have generated consistent incremental growth in revenue and have low cash flow volatility due to the following characteristics:

•

Consistent demand for our sites. As a result of rapidly growing usage of wireless services and the corresponding wireless industry capital spending trends in the markets we serve, we anticipate consistent demand for our communications sites. We believe that our global asset base positions us well to benefit from the increasing proliferation of advanced wireless devices and the increasing usage of high bandwidth applications on those devices. We have the ability to add new tenants and new equipment for existing tenants on our sites, which typically results in incremental revenue. Our legacy site portfolio and our established tenant base provide us with a solid platform for new business opportunities, which has historically resulted in consistent and predictable organic revenue growth.

•

Long-term tenant leases with contractual rent escalations. In general, a tenant lease has an initial non-cancellable ten-year term with multiple renewal terms, with provisions that periodically increase the rent due under the lease, typically annually based on a fixed escalation percentage (approximately 3.0% in the United States) or an inflationary index in our international markets, or a combination of both.

•

High lease renewal rates. Our tenants tend to renew leases because suitable alternative sites may not exist or be available and repositioning a site in their network may be expensive and may adversely affect the quality of their network. Historically, churn has been approximately 1% to 2% of total rental and management revenue per year. We define churn as revenue lost when a tenant cancels or does not renew its lease and, in limited circumstances, such as a tenant bankruptcy, reductions in lease rates on existing leases. We derive our churn rate for a given year by dividing our cash revenue lost on this basis by our comparable year ago period cash rental and management segment revenue.

•

High operating margins. Incremental operating costs associated with adding new tenants to an existing communications site are relatively minimal. Therefore, as tenants are added, the substantial majority of incremental revenue flows through to operating profit. In addition, in many of our international markets, certain expenses, such as ground rent or fuel costs, are passed through and shared across our tenant base.

•

Low maintenance capital expenditures. On average, we require relatively low amounts of annual capital expenditures to maintain our communications sites.

Our rental and management operations include the operation of communications towers, managed networks, the leasing of property interests and the provision of backup power through shared generators. Our domestic rental and management segment accounted for approximately 65%, 65% and 67% of our total revenues for the years ended December 31, 2014, 2013 and 2012, respectively.

Our international rental and management segment, which consists of communications sites in Brazil, Chile, Colombia, Costa Rica, Germany, Ghana, India, Mexico, Peru, South Africa and Uganda, provides a source of growth and diversification, including exposure to markets in various stages of wireless network development. In November 2014, we expanded our global footprint by signing an agreement to acquire over 4,800 communications sites in Nigeria. Our international rental and management segment accounted for approximately 33%, 33% and 30% of our total revenues for the years ended December 31, 2014, 2013 and 2012, respectively.

Communications Towers. Approximately 95%, 96% and 96% of revenue in our rental and management segments was attributable to our communications towers for the years ended December 31, 2014, 2013 and 2012, respectively.

We lease real estate on our communications towers to tenants providing a diverse range of communications services, including cellular voice and data, broadcasting, enhanced specialized mobile radio, mobile video and fixed microwave. Our top domestic and international tenants by revenue are as follows:

•

Domestic: AT&T Mobility, Sprint Nextel, Verizon Wireless and T-Mobile USA accounted for an aggregate of approximately 84% of domestic rental and management segment revenue for the year ended December 31, 2014.

•

International: Telefónica (in Brazil, Chile, Colombia, Costa Rica, Germany, Mexico and Peru), MTN Group Limited (in Ghana, South Africa and Uganda), Nextel International (in Brazil, Chile and Mexico), Grupo Iusacell, S.A. de C.V. (in Mexico, acquired by AT&T in January 2015) and Vodafone (in Germany, Ghana, India and South Africa), accounted for an aggregate of approximately 57% of international rental and management segment revenue for the year ended December 31, 2014.

Accordingly, we are subject to certain risks, as set forth in Item 1A of this Annual Report under the caption “Risk Factors—A substantial portion of our revenue is derived from a small number of tenants, and we are sensitive to changes in the creditworthiness and financial strength of our tenants.” In addition, we are subject to risks related to our international operations, as set forth under the caption “Risk Factors—Our foreign operations are subject to economic, political and other risks that could materially and adversely affect our revenues or financial position, including risks associated with fluctuations in foreign currency exchange rates.”

Managed Networks, Property Interests and Shared Generators. In addition to our communications sites, we also own and operate several types of managed network solutions, provide communications site management services to third parties, manage and lease property interests under carrier or other third-party communications sites and provide back-up power sources to tenants at our sites.

•

Managed Networks. We own and operate DAS networks primarily in malls and casinos in the United States, Brazil, Chile, Colombia, Ghana, India and Mexico. We obtain rights from property owners to install and operate in-building DAS networks, and we grant rights to wireless service providers to attach their equipment to our installations. We also offer outdoor DAS networks as a complementary shared infrastructure solution for our tenants in the United States. Typically, we design, build and operate our outdoor DAS networks in areas in which zoning restrictions or other barriers may prevent or delay deployment of more traditional wireless communications sites. We also hold lease rights and easement interests on rooftops capable of hosting communications equipment in locations where towers are generally not a viable solution based on area characteristics. In addition, we provide management services to property owners in the United States who elect to retain full rights to their property while simultaneously marketing the rooftop for wireless communications equipment installation. As the demand for advanced wireless devices in urban markets evolves, we continue to evaluate infrastructure, such as small cell deployment, that may support our tenants’ networks in these areas.

•

Property Interests. We own a portfolio of property interests in the United States under carrier or other third-party communications sites, which provides recurring cash flow under complementary leasing arrangements.

•

Shared Generators. We have contracts with certain of our tenants in the United States pursuant to which we provide access to shared backup power generators.

Network Development Services

Through our network development services, we offer tower-related services domestically, including site acquisition, zoning and permitting services and structural analysis services. Network development services primarily support our site leasing business and the addition of new tenants and equipment on our sites, including in connection with provider network upgrades. This segment accounted for approximately 2%, 2% and 3% of our total revenues for the years ended December 31, 2014, 2013 and 2012, respectively.

Site Acquisition, Zoning and Permitting. We engage in site acquisition services on our own behalf in connection with our tower development projects, as well as on behalf of our tenants. We typically work with our tenants’ engineers to determine the geographic areas where new communications sites will best address the tenants’ needs and meet their coverage objectives. Once a new site is identified, we acquire the rights to the land or structure on which the site will be constructed, and we manage the permitting process to ensure all necessary approvals are obtained to construct and operate the communications site.

Structural Analysis. We offer structural analysis services to wireless carriers in connection with the installation of their communications equipment on our towers. Our team of engineers can evaluate whether a tower structure can support the additional burden of the new equipment or if an upgrade is needed, which enables our tenants to better assess potential sites before making an installation decision. Our structural analysis capabilities enable us to provide higher quality service to our existing tenants by, among other things, reducing the time required to achieve operational readiness, while also providing opportunities to offer structural analysis services to third parties.

Strategy

Operational Strategy

Our operational strategy is to capitalize on the global growth in the use of wireless communications services and the evolution of advanced wireless handsets, tablets and other mobile devices, and the corresponding expansion of communications infrastructure required to deploy current and future generations of wireless communications technologies. To achieve this, our primary focus is to (i) increase the leasing of our existing communications real estate portfolio, (ii) invest in and selectively grow our communications real estate portfolio, (iii) further improve upon our operational performance and (iv) maintain a strong balance sheet. We believe these efforts will further support and enhance our ability to capitalize on the growth in demand for wireless infrastructure.

•

Increase the leasing of our existing communications real estate portfolio. We believe that our highest returns will be achieved by leasing additional space on our existing communications sites. Increasing demand for wireless services in the United States and in our international markets has resulted in significant capital spending by major wireless carriers. As a result, we anticipate consistent demand for our communications sites because they are attractively located for wireless service providers and have capacity available for additional tenants. In the United States, incremental carrier capital spending is being driven primarily by the build-out of fourth generation (4G) networks, while our international markets are in various stages of network development. As of December 31, 2014, we had a global average of approximately 1.9 tenants per tower. We believe that many of our towers have capacity for additional tenants and that substantially all of our towers that are currently at or near full structural capacity can be upgraded or augmented to meet future tenant demand with relatively modest capital investment. Therefore, we will continue to target our sales and marketing activities to increase the utilization and return on investment of our existing communications sites.

•

Invest in and selectively grow our communications real estate portfolio. We seek opportunities to invest in and grow our operations through our capital programs, new site construction and acquisitions. We believe we can achieve attractive risk-adjusted returns by pursuing such investments. In addition, we seek to secure property interests under our communications sites to improve operating margins as we reduce our cash operating expense related to ground leases.

•

Further improve upon our operational performance. We will continue to seek opportunities to improve our operational performance throughout the organization. This includes investing in our systems and people as we strive to improve our efficiencies and provide superior service to our customers. To achieve this, we intend to continue to focus on customer service, such as reducing cycle times for key functions, including lease processing and tower structural analysis.

•

Maintain a strong balance sheet. We remain committed to our disciplined financial policies, which we believe result in our ability to maintain a strong balance sheet and will support our overall strategy and focus on asset growth and operational excellence. As a result of these policies, we currently have investment grade ratings. We remain committed to reducing our net leverage through a combination of debt repayment and our continued growth. We continue to focus on maintaining a strong liquidity position and, as of December 31, 2014, had approximately $2.7 billion of available liquidity. We believe that our investment grade ratings provide us consistent access to the capital markets and our liquidity provides us the ability to selectively invest in our portfolio.

Capital Allocation Strategy

The objective of our capital allocation strategy is to simultaneously increase adjusted funds from operations and our return on invested capital. To maintain our qualification for taxation as a REIT, we are required to distribute to our stockholders annually an amount equal to at least 90% of our REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). After complying with our REIT distribution requirements and paying dividends on our preferred stock, we plan to continue to allocate our available capital among investment alternatives that meet our return on investment criteria, while taking into account the repayment of debt, as necessary, to reduce our net leverage to be within our long-term target range.

•

Capital expenditure program. We will continue to invest in and expand our existing communications real estate portfolio through our annual capital expenditure program. This includes capital expenditures associated with maintenance, increasing the capacity of our existing sites and projects such as new site construction, land interest acquisitions and shared generator installations.

•

Acquisitions. We intend to pursue acquisitions of communications sites in our existing or new markets where we can meet our risk-adjusted return on investment criteria. Our risk-adjusted hurdle rates consider additional risks such as the country and counter-parties involved, investment and economic climate, legal and regulatory conditions and industry risk.

•

Return excess capital to stockholders. If we have excess capital available after funding (i) our required distributions, (ii) our capital expenditures, (iii) repayment of debt, as necessary, to reduce our net leverage ratio toward our targeted range and (iv) anticipated future investments, including acquisition opportunities, we will seek to return such excess capital to stockholders.

During 2014, we generated $2.1 billion of cash from operating activities, which along with incremental debt, was used to fund $1.9 billion of investments, including $1.0 billion of acquisitions and $974.4 million of capital expenditures. In addition, in 2014, we paid regular cash distributions in the aggregate of approximately $404.6 million to our common stockholders and approximately $16.0 million to our preferred stockholders.

International Growth Strategy

We believe that, in certain international markets, we can create substantial value by either establishing a new, or expanding our existing communications real estate leasing business. Therefore, we expect we will continue to seek international growth opportunities where we believe our risk-adjusted return objectives can be

achieved. We strive to maintain a diversified approach to our international growth strategy by complementing our presence in emerging markets with operations in more developed and established markets, which enables us to leverage multiple stages of wireless network development throughout our global footprint. Our international growth strategy includes a disciplined, individualized market evaluation, in which we conduct the following analyses:

•

Country analysis. Prior to entering a new market, we conduct an extensive review of the country’s historical and projected macroeconomic fundamentals, including inflation outlook and foreign currency exchange rate trends, capital markets, tax regime and investment alternatives, and the general business, political and legal environments, including property rights and regulatory regime.

•

Wireless industry analysis. To confirm the presence of sufficient demand to support an independent tower company, we analyze the competitiveness of the country’s wireless market, such as the pricing environment, past and potential industry consolidation and the stage of its wireless network development. Characteristics that result in an attractive investment opportunity include (i) multiple competitive wireless service providers who are actively seeking to invest in deploying voice and data networks and (ii) incremental spectrum from auctions that have occurred or are anticipated to occur is being, or will be, deployed.

•

Opportunity and counterparty analysis. Once an investment opportunity is identified within a geographic area with an attractive wireless industry, we conduct a multifaceted opportunity and counterparty analysis. This includes evaluating (i) the type of transaction, (ii) its ability to meet our risk-adjusted return criteria given the country and the counterparties involved, including the anticipated anchor tenant and (iii) how the transaction fits within our long-term strategic objectives, including future potential investment and expansion within the region.

Recent Transactions

Acquisitions

From January 1, 2014 through December 31, 2014, we increased our communications site portfolio by approximately 8,450 sites, including approximately 3,133 build-to-suits, and we believe the assets constructed and acquired will be accretive to our consolidated operating margins. Significant acquisitions during the year ended December 31, 2014 included the acquisition of (i) 100% of the equity interests of BR Towers S.A., a Brazilian telecommunications real estate company (“BR Towers”), which at closing owned, or held exclusive use rights for, 4,617 towers and 47 property interests in Brazil and (ii) entities holding a portfolio of 59 communications sites, which at the time of acquisition were leased primarily to radio and television broadcast tenants, and four property interests in the United States from Richland Properties LLC and other related entities (“Richland”).

In addition, during the fourth quarter of 2014, we signed definitive agreements to acquire approximately 11,280 additional communications sites in Brazil and Nigeria, and in February 2015, we signed a definitive agreement for the Proposed Verizon Transaction to acquire the exclusive right to lease, acquire or otherwise operate and manage up to 11,489 wireless communications sites in the United States.

We continue to evaluate potential complementary services to supplement our growth and expansion strategy, as well as opportunities to acquire communications real estate portfolios that we believe we can effectively integrate into our existing business. For more information about our acquisitions, see note 6 to our consolidated financial statements included in this Annual Report.

Financing Transactions

During the year ended December 31, 2014, to complement our operational strategy to selectively invest in and grow our communications real estate portfolio, we strengthened our balance sheet by completing a number of

key financing initiatives, including those set forth below. For more information about our financing transactions, see Item 7 of this Annual Report under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and note 8 to our consolidated financial statements included in this Annual Report.

Senior Notes Offerings. In January 2014, we completed a registered public offering through a reopening of our (i) 3.40% senior unsecured notes due 2019 (the “3.40% Notes”), in an aggregate principal amount of $250.0 million and our (ii) 5.00% senior unsecured notes due 2024 (the “5.00% Notes”), in an aggregate principal amount of $500.0 million. In August 2014, we completed a registered public offering of our 3.450% senior unsecured notes due 2021 (the “3.450% Notes”) in an aggregate principal amount of $650.0 million. We used the net proceeds from each offering primarily to repay certain indebtedness under our existing credit facilities.

Mandatory Convertible Preferred Stock Offering. In May 2014, we completed a registered public offering of 6,000,000 shares of our 5.25% Mandatory Convertible Preferred Stock, Series A, par value $0.01 per share (the “Mandatory Convertible Preferred Stock”). We used the net proceeds from the offering to fund acquisitions initially funded by indebtedness incurred under our $2.0 billion multi-currency senior unsecured revolving credit facility (the “2013 Credit Facility”).

Credit Facilities. In September 2014, we entered into an amendment and restatement of our $1.0 billion senior unsecured revolving credit facility (the “2012 Credit Facility”, as amended and restated, the “2014 Credit Facility”), which, among other things, increased the commitments thereunder to $1.5 billion and extended the maturity date to January 31, 2020. As a result, as of December 31, 2014, we had the ability to borrow up to $2.4 billion under our existing credit facilities, net of any outstanding letters of credit.

Regulatory Matters

Towers and Antennas. Our domestic and international tower business is subject to national, state and local regulatory requirements with respect to the registration, siting, construction, lighting, marking and maintenance of our towers. In the United States, which accounted for approximately 66% of our total rental and management revenue for the year ended December 31, 2014, the construction of new towers or modifications to existing towers may require pre-approval by the Federal Communications Commission (“FCC”) and the Federal Aviation Administration (“FAA”), depending on factors such as tower height and proximity to public airfields. Towers requiring pre-approval must be registered with the FCC and maintained in accordance with FAA standards. Similar requirements regarding pre-approval of the construction and modification of towers are imposed by regulators in other countries. Non-compliance with applicable tower-related requirements may lead to monetary penalties or site deconstruction orders.

Furthermore, in India, each of our subsidiaries holds an Infrastructure Provider Category-I license (“IP-I”) issued by the Indian Ministry of Communications and Information Technology, which permits us to provide tower space to companies licensed as telecommunications service providers under the Indian Telegraph Act of 1885. As a condition to the IP-I, the Indian government has the right to take over telecommunications infrastructure in the case of emergency or war. In Ghana, our subsidiary holds a Communications Infrastructure License, issued by the National Communications Authority (“NCA”), which permits us to establish and maintain passive telecommunications infrastructure services and DAS networks for communications service providers licensed by the NCA. While we are required to provide tower space on a non-discriminatory basis, we may negotiate mutually agreeable terms and conditions with such service providers. In Chile, our subsidiary is classified as a Telecom Intermediate Service Provider. We have received a number of site specific concessions and are working with the Chilean Subsecretaria de Telecommunicaciones to receive concessions on our remaining sites in Chile.

Our international business operations may be subject to increased licensing fees or ownership restrictions. For example, in South Africa, the Broad-Based Black Economic Empowerment Act, 2003 (the “BBBEE Act”)

has established a legislative framework for the promotion of economic empowerment of South African citizens disadvantaged by Apartheid. Accordingly, the BBBEE Act and related codes measure BBBEE Act compliance and good corporate practice by the inclusion of certain ownership, management control, employment equity and other metrics for companies that do business there. In addition, certain municipalities have sought to impose permit fees based upon structural or operational requirements of towers. Our foreign operations may be affected if a country’s regulatory authority restricts or revokes spectrum licenses of certain wireless service providers or implements limitations on foreign ownership.

In all countries where we operate, we are subject to zoning restrictions and restrictive covenants imposed by local authorities or community organizations. While these regulations vary, they typically require tower owners or tenants to obtain approval from local authorities or community standards organizations prior to tower construction or the addition of a new antenna to an existing tower. Local zoning authorities and community residents often oppose construction in their communities, which can delay or prevent new tower construction, new antenna installation or site upgrade projects, thereby limiting our ability to respond to tenant demand. In addition, zoning regulations can increase costs associated with new tower construction, tower modifications, and additions of new antennas to a site or site upgrades. Existing regulatory policies may adversely affect the associated timing or cost of such projects and additional regulations may be adopted that cause delays or result in additional costs to us. These factors could materially and adversely affect our construction activities and operations. In the United States, the Telecommunications Act of 1996 prohibits any action by state and local authorities that would discriminate between different providers of wireless services or ban altogether the construction, modification or placement of communications sites. It also prohibits state or local restrictions based on the environmental effects of radio frequency emissions to the extent the facilities comply with FCC regulations. Further, in February 2012, the United States government adopted regulations requiring that local and state governments approve modifications or collocations that qualify as eligible facilities under the regulations.

Portions of our business are subject to additional regulations, for example, in a number of states throughout the United States, certain of our subsidiaries hold Competitive Local Exchange Carrier (CLEC) or other status, in connection with the operation of our outdoor DAS networks business. In addition, we or our domestic and international tenants may be subject to new regulatory policies in certain jurisdictions from time to time that may materially and adversely affect our business or the demand for our communications sites.

Environmental Matters. Our domestic and international operations are subject to various national, state and local environmental laws and regulations, including those relating to the management, use, storage, disposal, emission and remediation of, and exposure to, hazardous and non-hazardous substances, materials and wastes and the siting of our towers. We may be required to obtain permits, pay additional property taxes, comply with regulatory requirements and make certain informational filings related to hazardous substances or devices used to provide power such as batteries, generators and fuel at our sites. Violations of these types of regulations could subject us to fines or criminal sanctions.

Additionally, in the United States and many other international markets where we do business, before constructing a new tower or adding an antenna to an existing site, we must review and evaluate the impact of the action to determine whether it may significantly affect the environment and whether we must disclose any significant impacts in an environmental assessment. If a tower or new antenna might have a material adverse impact on the environment, FCC or other governmental approval of the tower or antenna could be significantly delayed.

Health and Safety. In the United States and in other countries where we operate, we are subject to various national, state and local laws regarding employee health and safety, including protection from radio frequency exposure.

Competition

We compete, both for new business and for the acquisition of assets, with other public tower companies, such as Crown Castle International Corp., SBA Communications Corporation and GTL Infrastructure Limited, wireless carrier tower consortia such as Indus Towers and private tower companies, independent wireless carriers, tower owners, broadcasters and owners of non-communications sites, including rooftops, utility towers, water towers and other alternative structures. We believe that site location and capacity, network density, price, quality and speed of service have been, and will continue to be, significant competitive factors affecting owners, operators and managers of communications sites.

Our network development services business competes with a variety of companies offering individual, or combinations of, competing services. The field of competitors includes site acquisition consultants, zoning consultants, real estate firms, right-of-way consultants, structural engineering firms, tower owners/managers, telecommunications equipment vendors who can provide turnkey site development services through multiple subcontractors and our tenants’ personnel. We believe that our tenants base their decisions for network development services on various criteria, including a company’s experience, local reputation, price and time for completion of a project.

Customer Demand

Our strategy is predicated on the belief that wireless service providers will continue to invest in the coverage, quality and capacity of their networks in both our domestic and international markets, driving demand for our communications sites.

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Domestic wireless network investments. According to industry data, aggregate annual wireless capital spending in the United States has averaged over $30 billion over the past three years, resulting in consistent demand for our sites. Demand for our domestic communications sites is driven by:

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Increasing wireless data usage, which continues to incentivize wireless service providers to focus on network quality and make incremental investments in the coverage and capacity of their networks;

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Subscriber adoption of advanced wireless data applications such as mobile Internet and video, increasingly advanced devices and the corresponding deployments and densification of advanced networks by wireless service providers to satisfy this incremental demand for high-bandwidth wireless data;

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Deployment of newly acquired spectrum; and

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Deployment of wireless and backhaul networks by new market entrants.

As consumer demand for and use of advanced wireless services in the United States grow, wireless service providers may be compelled to deploy new technology and equipment, further increase the cell density of their existing networks and expand their network coverage.

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International wireless network investments. The wireless networks in most of our international markets are typically less advanced than those in our domestic market with respect to the density of voice networks and the current technologies generally deployed for wireless services. Accordingly, demand for our international communications sites is primarily driven by:

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Incumbent wireless service providers investing in existing voice networks to improve or expand their coverage and increase capacity;

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In certain of our international markets, increasing subscriber adoption of wireless data applications, such as email, Internet and video;

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Spectrum auctions, which result in new market entrants, as well as initial and incremental data network deployments; and

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The increasing availability of lower cost smartphones internationally.

We believe demand for our communications sites will continue as wireless service providers seek to increase the quality, coverage area and capacity of their existing networks, while also investing in next generation data networks. To meet these network objectives, we believe wireless carriers will continue to outsource their communications site infrastructure needs as a means to accelerate network development and more efficiently use their capital, rather than construct and operate their own communications sites and maintain their own communications site operation and development capabilities. In addition, because our network development services are complementary to our rental and management business, we believe demand for our network development services will continue, consistent with industry trends.

Any increase in the use of network sharing, roaming or resale arrangements by wireless service providers could adversely affect customer demand for tower space. These arrangements enable a provider to serve its customers outside the provider’s license area, to give licensed providers the right to enter into arrangements to serve overlapping license areas and to permit non-licensed providers to enter the wireless marketplace. Consolidation among wireless carriers could similarly impact customer demand for our communications sites because the existing networks of wireless carriers often overlap. In addition, wireless carriers sharing their sites or permitting equipment location swapping on their sites with other carriers to a significant degree could reduce demand for our communications sites. Further, our tenants may be subject to new regulatory policies from time to time that materially and adversely affect the demand for our communications sites.

In addition, our customer demand could be adversely affected by the emergence and growth of new technologies, which could make it possible for wireless carriers to increase the capacity and efficiency of their existing networks without the need for incremental cell sites. The increased use of spectrally efficient technologies or the availability of significant incremental spectrum in the marketplace could potentially relieve a portion of our tenants’ network capacity problems, and as a result, could reduce the demand for tower-based antenna space. Additionally, certain complementary network technologies, such as small cell deployments, could shift a portion of our tenants’ network investments away from the traditional tower-based networks, which may reduce the need for carriers to add more equipment at certain communications sites.

Employees

As of December 31, 2014, we employed 2,974 full-time individuals and consider our employee relations to be satisfactory.

Available Information

Our Internet website address is www.americantower.com. Information contained on our website is not incorporated by reference into this Annual Report, and you should not consider information contained on our website as part of this Annual Report. You may access, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, plus amendments to such reports as filed or furnished pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), through the “Investor Relations” portion of our website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (“SEC”).

We have adopted a written Code of Ethics and Business Conduct Policy (the “Code of Conduct”) that applies to all of our employees and directors, including, but not limited to, our principal executive officer, principal financial officer and principal accounting officer or controller or persons performing similar functions. The Code of Conduct, our corporate governance guidelines and the charters of the audit, compensation and nominating and corporate governance committees of our Board of Directors are available at the “Investor Relations” portion of our website. In the event we amend the Code of Conduct, or provide any waivers under the Code of Conduct to our directors or executive officers, we will disclose these events on our website as required by the regulations of the New York Stock Exchange (the “NYSE”) and applicable law.

In addition, paper copies of these documents may be obtained free of charge by writing us at the following address: 116 Huntington Avenue, Boston, Massachusetts 02116, Attention: Investor Relations; or by calling us at (617) 375-7500.

ITEM 1A.

RISK FACTORS

Decrease in demand for our communications sites would materially and adversely affect our operating results, and we cannot control that demand.

Factors affecting the demand for our communications sites and, to a lesser extent, our network development services, could materially and adversely affect our operating results. Those factors include:

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increased use of network sharing without compensation to us, roaming or resale arrangements by wireless service providers;

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mergers or consolidations among wireless service providers;

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zoning, environmental, health or other government regulations or changes in the application and enforcement thereof;

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governmental licensing of spectrum or restricting or revoking spectrum licenses;

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a decrease in consumer demand for wireless services due to general economic conditions or other factors, including inflation;

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the ability and willingness of wireless service providers to maintain or increase capital expenditures on network infrastructure;

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the financial condition of wireless service providers;

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delays or changes in the deployment of next generation wireless technologies; and

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technological changes.

Any downturn in the economy or disruption in the financial and credit markets could impact consumer demand for wireless services. If wireless service subscribers significantly reduce their minutes of use, or fail to widely adopt and use wireless data applications, our wireless service provider tenants could experience a decrease in demand for their services. As a result, our tenants may scale back their capital expenditure plans, which could materially and adversely affect leasing demand for our communications sites and our network development services business, which could have a material adverse effect on our business, results of operations or financial condition.

If our tenants share site infrastructure to a significant degree or consolidate or merge, our growth, revenue and ability to generate positive cash flows could be materially and adversely affected.

Extensive sharing of site infrastructure, roaming or resale arrangements among wireless service providers as an alternative to leasing our communications sites without compensation to us may cause new lease activity to slow if carriers utilize shared equipment rather than deploy new equipment, or may result in the decommissioning of equipment on certain existing sites because portions of the tenants’ networks may become redundant. In addition, significant consolidation among our tenants may materially and adversely affect our growth and revenues. Certain combined companies have rationalized duplicative parts of their networks or modernized their networks, and these and other tenants could determine not to renew leases with us as a result. Our ongoing contractual revenues and our future results may be negatively impacted if a significant number of these leases are not renewed.

Increasing competition for tenants in the tower industry may materially and adversely affect our pricing.

Our industry is highly competitive and our tenants have numerous alternatives in leasing antenna space. Competitive pricing for tenants on towers from competitors could materially and adversely affect our lease rates.

We may not be able to renew existing tenant leases or enter into new tenant leases, or if we are able to renew or enter new leases, it may be at rates lower than our current rates, resulting in a material adverse impact on our results of operations and growth rate. In addition, should inflation rates exceed our fixed escalator percentages in markets where the majority of our leases include fixed escalators, our income would be adversely affected. Increasing competition for tenants or significant increases in inflation rates could materially and adversely affect our business, results of operations or financial condition.

Competition for assets could adversely affect our ability to achieve our return on investment criteria.

We may experience increased competition, which could make the acquisition of high quality assets significantly more costly. Some of our competitors are larger and may have greater financial resources than we do, while other competitors may apply lower investment criteria than we do. In addition, we may not anticipate increased competition entering a particular market or competing for the same assets. Higher prices for assets could make it more difficult to achieve our return on investment criteria, which could materially and adversely affect our business, results of operations or financial condition.

Our business is subject to government regulations and changes in current or future laws or regulations could restrict our ability to operate our business as we currently do.

Our business and that of our tenants are subject to federal, state, local and foreign regulations. In certain jurisdictions, these regulations could be applied or enforced retroactively, which could require that we modify or dismantle an existing tower. Zoning authorities and community organizations are often opposed to the construction in their communities, which can delay, prevent or increase the cost of new tower construction, modifications, additions of new antennas to a site or site upgrades, thereby limiting our ability to respond to tenant demands and requirements. In addition, in certain foreign jurisdictions, we are required to pay annual license fees, and these fees may be subject to substantial increases by the government. Foreign jurisdictions in which we operate and currently are not required to pay license fees may enact license fees, which may apply retroactively. In certain foreign jurisdictions, there may be changes to zoning regulations or construction laws based on site location, which may result in increased costs to modify certain of our existing towers or decreased revenue due to the removal of certain towers to ensure compliance with such changes. Existing regulatory policies may materially and adversely affect the associated timing or cost of construction projects associated with our communications sites and additional regulations may be adopted that increase delays or result in additional costs to us, or that prevent such projects in certain locations. Furthermore, the tax laws, regulations and interpretations governing REITs may change at any time, perhaps with retroactive effect. In addition, some of these changes could have a more significant impact on us as compared to other REITs due to the nature of our business and our use of TRSs. These factors could materially and adversely affect our business, results of operations or financial condition. Furthermore, some foreign jurisdictions have implemented regulations governing investment funds or their managers, which may be interpreted to apply to REITs, and there is uncertainty as to the interpretation and implementation of these regulations.

Our leverage and debt service obligations may materially and adversely affect us.

Our leverage could render us unable to generate cash sufficient to pay when due the principal of, interest on, or other amounts due with respect to, our indebtedness. We are also permitted, subject to certain restrictions under our existing indebtedness, to draw down on our credit facilities and obtain additional long-term debt and working capital lines of credit to meet future financing needs.

Our leverage could have significant negative consequences to our business, results of operations or financial condition, including:

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impairing our ability to meet one or more of the financial ratio covenants contained in our debt agreements or to generate cash sufficient to pay interest or principal due under those agreements, which could result in an acceleration of some or all of our outstanding debt and the loss of the towers securing such debt if an uncured default occurs;

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increasing our borrowing costs if our current investment grade debt ratings decline;

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placing us at a possible competitive disadvantage to less leveraged competitors and competitors that may have better access to capital resources, including with respect to acquiring assets;

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limiting our ability to obtain additional debt or equity financing, thereby increasing our vulnerability to general adverse economic and industry conditions;

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requiring the dedication of a substantial portion of our cash flow from operations to service our debt, thereby reducing the amount of our cash flow available for other purposes, including capital expenditures, REIT distributions and preferred stock dividends;

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requiring us to issue debt or equity securities or to sell some of our core assets, possibly on unfavorable terms, to meet payment obligations;

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limiting our flexibility in planning for, or reacting to, changes in our business and the markets in which we compete; and

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limiting our ability to repurchase our common stock or make distributions to our stockholders.

In addition, to meet the REIT distribution requirements and maintain our qualification and taxation as a REIT, we may need to borrow funds, even if the then-prevailing market conditions are not favorable, and the REIT distribution requirements may increase the financing we need to fund capital expenditures, future growth and expansion initiatives. This would increase our total leverage.

Failure to successfully and efficiently integrate acquired or leased assets, including from the Proposed Verizon Transaction (the “Verizon Assets”), into our operations may adversely affect our business, operations and financial condition.

Integrating acquired portfolios of communications sites may require significant resources, as well as attention from our management team. In addition, we may incur certain non-recurring charges associated with the integration of acquired or leased assets or businesses into our operations. Further, the significant acquisition-related integration costs could materially and adversely affect our results of operations in the period in which such charges are recorded or our cash flow in the period in which any related costs are actually paid. For example, the integration of the Verizon Assets, which includes up to 11,489 towers, into our operations will be a significant undertaking, and we anticipate that we will incur certain non-recurring charges associated with the integration of the Verizon Assets into our operations, including costs for tasks such as tower visits and audits and ground and tenant lease verifications. Additional integration challenges include:

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transitioning all data related to the Verizon Assets, tenants and landlords to a common information technology system;

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successfully marketing space on the Verizon Assets;

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successfully transitioning the ground lease rent payment and the tenant billing and collection processes;

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retaining existing tenants on the Verizon Assets; and

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maintaining our standards, controls, procedures and policies with respect to the Verizon Assets.

Additionally, we may fail to successfully integrate the assets we acquire or fail to utilize such assets to their full capacity. If we are not able to meet these integration challenges, we may not realize the benefits we expect from our acquired portfolios and businesses, including the Proposed Verizon Transaction, and our business, financial condition and results of operations will be adversely affected.

Our expansion initiatives involve a number of risks and uncertainties that could adversely affect our operating results, disrupt our operations or expose us to additional risk.

As we continue to acquire communications sites in our existing markets and expand into new markets, we are subject to a number of risks and uncertainties, including not meeting our return on investment criteria and financial objectives, increased costs, assumed liabilities and the diversion of managerial attention due to acquisitions. Achieving the benefits of acquisitions depends in part on timely and efficiently integrating operations, communications tower portfolios and personnel. Integration may be difficult and unpredictable for many reasons, including, among other things, differing systems and processes, cultural differences, customary business practices and conflicting policies, procedures and operations. In addition, integrating businesses may significantly burden management and internal resources, including the potential loss or unavailability of key personnel.

Furthermore, our international expansion initiatives are subject to additional risks such as those described in the risk factor immediately below, some of which may require additional resources and personnel.

In addition, as a result of prior acquisitions, we have a substantial amount of intangible assets and goodwill. In accordance with accounting principles generally accepted in the United States (“GAAP”), we are required to assess our goodwill and other intangible assets annually or more frequently in the event of circumstances indicating potential impairment to determine if they are impaired. If the testing performed indicates that an asset may not be recoverable, we are required to record a non-cash impairment charge for the difference between the carrying value of the goodwill or other intangible assets and the implied fair value of the goodwill or the estimated fair value of other intangible assets in the period the determination is made.

Our expansion initiatives may not be successful or we may be required to record impairment charges for our goodwill or for other intangible assets, which could have a material adverse effect on our business, results of operations or financial condition.

Our foreign operations are subject to economic, political and other risks that could materially and adversely affect our revenues or financial position, including risks associated with fluctuations in foreign currency exchange rates.

Our international business operations and our expansion into new markets in the future could result in adverse financial consequences and operational problems not typically experienced in the United States. We anticipate that our revenues from our international operations will continue to grow. Accordingly, our business is subject to risks associated with doing business internationally, including:

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changes to existing or new tax laws or methodologies impacting our international operations, or fees directed specifically at the ownership and operation of communications sites or our international acquisitions, any of which may be applied or enforced retroactively;

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laws or regulations that tax or otherwise restrict repatriation of earnings or other funds or otherwise limit distributions of capital;

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changes in a specific country’s or region’s political or economic conditions, including inflation or currency devaluation;

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changes to zoning regulations or construction laws, which could be applied retroactively to our existing communications sites;

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expropriation or governmental regulation restricting foreign ownership or requiring reversion or divestiture;

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actions restricting or revoking spectrum licenses or suspending or terminating business under prior licenses;

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failure to comply with anti-bribery laws such as the Foreign Corrupt Practices Act or similar local anti-bribery laws, or Office of Foreign Assets Control requirements;

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material site security issues;

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significant license surcharges;

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increases in the cost of labor (as a result of unionization or otherwise), power and other goods and services required for our operations;

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price setting or other similar laws for the sharing of passive infrastructure; and

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uncertain or inconsistent laws, regulations, rulings or results from legal or judicial systems, which may be enforced retroactively, and delays in the judicial process.

We also face risks associated with changes in foreign currency exchange rates, including those arising from our operations, investments and financing transactions related to our international business. Volatility in foreign currency exchange rates can also affect our ability to plan, forecast and budget for our international operations and expansion efforts. Our revenues earned from our international operations are primarily denominated in their respective local currencies. We have not historically engaged in significant currency hedging activities relating to our non-U.S. Dollar operations, and a weakening of these foreign currencies against the U.S. Dollar would negatively impact our reported revenues, operating profits and income.

In our international operations, many of our tenants are subsidiaries of global telecommunications companies. These subsidiaries may not have the explicit or implied financial support of their parent entities.

In addition, as we continue to invest in joint venture opportunities internationally, our partners may have business or economic goals that are inconsistent with ours, be in positions to take action contrary to our interests, policies or objectives, have competing interests in our, or other, markets that could create conflict of interest issues, withhold consents contrary to our requests or become unable or unwilling to fulfill their commitments, any of which could expose us to additional liabilities or costs, including requiring us to assume and fulfill the obligations of that joint venture.

A substantial portion of our revenue is derived from a small number of tenants, and we are sensitive to changes in the creditworthiness and financial strength of our tenants.

A substantial portion of our total operating revenues is derived from a small number of tenants. If any of these tenants is unwilling or unable to perform its obligations under our agreements with it, our revenues, results of operations, financial condition and liquidity could be materially and adversely affected. In the ordinary course of our business, we do occasionally experience disputes with our tenants, generally regarding the interpretation of terms in our leases. Historically, we have resolved these disputes in a manner that did not have a material adverse effect on us or our tenant relationships. However, it is possible that such disputes could lead to a termination of our leases with tenants or a material modification of the terms of those leases, either of which could have a material adverse effect on our business, results of operations or financial condition. If we are forced to resolve any of these disputes through litigation, our relationship with the applicable tenant could be terminated or damaged, which could lead to decreased revenue or increased costs, resulting in a corresponding adverse effect on our business, results of operations or financial condition.

Due to the long-term nature of our tenant leases, we depend on the continued financial strength of our tenants. Many wireless service providers operate with substantial leverage. Sometimes our tenants, or their parent companies, face financial difficulty or file for bankruptcy.

In addition, many of our tenants and potential tenants rely on capital raising activities to fund their operations and capital expenditures, which may be more difficult or expensive in the event of downturns in the economy or disruptions in the financial and credit markets. If our tenants or potential tenants are unable to raise

adequate capital to fund their business plans, they may reduce their spending, which could materially and adversely affect demand for our communications sites and our network development services business. If, as a result of a prolonged economic downturn or otherwise, one or more of our significant tenants experienced financial difficulties or filed for bankruptcy, it could result in uncollectible accounts receivable and an impairment of our deferred rent asset, tower asset, network location intangible asset or customer-related intangible asset. The loss of significant tenants, or the loss of all or a portion of our anticipated lease revenues from certain tenants, could have a material adverse effect on our business, results of operations or financial condition.

New technologies or changes in a tenant’s business model could make our tower leasing business less desirable and result in decreasing revenues.

The development and implementation of new technologies designed to enhance the efficiency of wireless networks or changes in a tenant’s business model could reduce the need for tower-based wireless services, decrease demand for tower space or reduce previously obtainable lease rates. In addition, tenants may have less of their budgets allocated to lease space on our towers, as the industry is trending towards deploying increased capital to the development and implementation of new technologies. Examples of these technologies include spectrally efficient technologies, which could relieve a portion of our tenants’ network capacity needs and as a result, could reduce the demand for tower-based antenna space. Additionally, certain small cell complementary network technologies could shift a portion of our tenants’ network investments away from the traditional tower-based networks, which may reduce the need for carriers to add more equipment at certain communications sites. Moreover, the emergence of alternative technologies could reduce the need for tower-based broadcast services transmission and reception. Further, a tenant may decide to no longer outsource tower infrastructure or otherwise change its business model, which would result in a decrease in our revenue. The development and implementation of any of these and similar technologies to any significant degree or changes in a tenant’s business model could have a material adverse effect on our business, results of operations or financial condition.

If we fail to remain qualified as a REIT, we will be subject to tax at corporate income tax rates, which may substantially reduce funds otherwise available.

Effective for the taxable year beginning January 1, 2012, we began operating as a REIT for federal income tax purposes. If we fail to remain qualified as a REIT, we will be taxed at corporate income tax rates unless certain relief provisions apply.

Qualification as a REIT requires the application of certain highly technical and complex provisions of the Internal Revenue Code of 1986, as amended (the “Code”), which provisions may change from time to time, to our operations as well as various factual determinations concerning matters and circumstances not entirely within our control. Further, tax reform proposals, if enacted, may adversely affect our ability to remain qualified as a REIT or the benefits of remaining so qualified. There are limited judicial or administrative interpretations of the relevant provisions of the Code.

If, in any taxable year, we fail to qualify for taxation as a REIT and are not entitled to relief under the Code:

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we will not be allowed a deduction for distributions to stockholders in computing our taxable income;

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we will be subject to federal and state income tax, including any applicable alternative minimum tax, on our taxable income at regular corporate tax rates; and

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we will be disqualified from REIT tax treatment for the four taxable years immediately following the year during which we were so disqualified.

Any corporate tax liability could be substantial and would reduce the amount of cash available for other purposes. If we fail to qualify for taxation as a REIT, we may need to borrow additional funds or liquidate some

investments to pay any additional tax liability. Accordingly, funds available for investment, operations and distribution would be reduced.

Furthermore, as a result of our acquisition of MIP Tower Holdings LLC (“MIPT”), we own an interest in a subsidiary REIT. The subsidiary REIT is independently subject to, and must comply with, the same REIT requirements that we must satisfy in order to qualify as a REIT, together with all other rules applicable to REITs. If the subsidiary REIT fails to qualify as a REIT, and certain relief provisions do not apply, then (i) the subsidiary REIT would become subject to federal income tax, (ii) the subsidiary REIT will be disqualified from treatment as a REIT for the four taxable years immediately following the year during which qualification was lost, (iii) our ownership of shares in such subsidiary REIT will cease to be a qualifying asset for purposes of the asset tests applicable to REITs and any dividend income or gains derived by us from such subsidiary REIT may cease to be treated as income that qualifies for purposes of the 75% gross income test and (iv) we may fail certain of the asset tests applicable to REITs, in which event we will fail to qualify as a REIT unless we are able to avail ourselves of specified relief provisions.

Complying with REIT requirements may limit our flexibility or cause us to forego otherwise attractive opportunities.

Our use of TRSs enables us to engage in non-REIT qualifying business activities. Under the Code, no more than 25% of the value of the assets of a REIT may be represented by securities of one or more TRSs and other non-qualifying assets. This limitation may hinder our ability to make certain attractive investments, including the purchase of non-qualifying assets, the expansion of non-real estate activities and investments in the businesses to be conducted by our TRSs, and to that extent limit our opportunities and our flexibility to change our business strategy.

Specifically, this limitation may affect our ability to make additional investments in our managed networks business or network development services segment as currently structured and operated, in other non-REIT qualifying operations or assets, or in international operations conducted through TRSs that we do not elect to bring into the REIT structure. Further, acquisition opportunities in domestic and international markets may be adversely affected if we need or require the target company to comply with certain REIT requirements prior to closing.

Further, as a REIT, we must distribute to our stockholders an amount equal to at least 90% of the REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). To meet our annual distribution requirements, we may be required to distribute amounts that may otherwise be used for our operations, including amounts that may otherwise be invested in future acquisitions, capital expenditures or repayment of debt. As no more than 25% of our gross income may consist of dividend income from our TRSs and other non-qualifying types of income, our ability to receive distributions from our TRSs may be limited and may impact our ability to fund distributions to our stockholders or to use income of our TRSs to fund other investments.

In addition, the majority of our income and cash flows from our TRSs are generated from our international operations. In many cases, there are local withholding taxes and currency controls that may impact our ability or willingness to repatriate funds to the United States to help satisfy REIT distribution requirements.

Certain of our business activities may be subject to corporate level income tax and foreign taxes, which reduce our cash flows and may create deferred and contingent tax liabilities.

We are subject to certain federal, state, local and foreign taxes on our income and assets, including alternative minimum taxes, taxes on any undistributed income and state, local or foreign income, franchise, property and transfer taxes. Any of these taxes decrease our earnings and our available cash.

We are also subject to the continuous examination of our income tax returns by the U.S. Internal Revenue Service and state, local and foreign tax authorities. The results of an audit and examination of previously filed tax returns and continuing assessments of our tax exposures may have an adverse effect on our provision for income taxes and cash tax liability.

Our TRS assets and operations will continue to be subject, as applicable, to federal and state corporate income taxes and to foreign taxes in the jurisdictions in which those assets and operations are located.

We may need additional financing to fund capital expenditures, future growth and expansion initiatives and to satisfy our REIT distribution requirements.

To fund capital expenditures, future growth and expansion initiatives and to satisfy our REIT distribution requirements, we may need to raise additional capital through financing activities, asset sales or equity issuances. We anticipate that we may need to obtain additional sources of capital in the future to fund capital expenditures, future growth and expansion initiatives and satisfy our REIT distribution requirements. Depending on market conditions, we may seek to raise capital through credit facilities or debt or equity offerings. An increase in our outstanding debt could lead to a downgrade of our credit rating. A downgrade of our credit rating below investment grade could negatively impact our ability to access credit markets or preclude us from obtaining funds on investment grade terms and conditions. Further, certain of our current debt instruments limit the amount of indebtedness we and our subsidiaries may incur. Additional financing, therefore, may be unavailable, more expensive or restricted by the terms of our outstanding indebtedness. If we are unable to raise capital when our needs arise, we may not be able to fund our capital expenditures, future growth and expansion initiatives or satisfy our REIT distribution requirements.

If we are unable to protect our rights to the land under our towers, it could adversely affect our business and operating results.

Our real property interests relating to our towers consist primarily of leasehold and sub-leasehold interests, fee interests, easements, licenses and rights-of-way. A loss of these interests at a particular tower site may interfere with our ability to operate a tower and generate revenues. For various reasons, we may not always have the ability to access, analyze and verify all information regarding titles and other issues prior to completing an acquisition of communications sites, which can affect our rights to access and operate a site. From time to time we also experience disputes with landowners regarding the terms of ground agreements for land under towers, which can affect our ability to access and operate tower sites. Further, for various reasons, landowners may not want to renew their ground agreements with us, they may lose their rights to the land, or they may transfer their land interests to third parties, including ground lease aggregators, which could affect our ability to renew ground agreements on commercially viable terms. A significant number of the communications sites in our portfolio are located on land we lease pursuant to operating leases, and the ground leases for these sites have a final expiration date of 2024 and beyond. Further, for various reasons, title to property interests in some of the foreign jurisdictions in which we operate may not be as certain as title to our property interests in the United States. Our inability to protect our rights to the land under our towers may have a material adverse effect on our business, results of operations or financial condition.

If we are unable or choose not to exercise our rights to purchase towers that are subject to lease and sublease agreements at the end of the applicable period, our cash flows derived from such towers will be eliminated.

Our communications real estate portfolio includes towers that we operate pursuant to lease and sublease agreements that include a purchase option at the end of each lease period. We may not have the required available capital to exercise our right to purchase leased or subleased towers at the end of the applicable period, or we may choose, for business or other reasons, not to exercise our right to purchase such towers. In the event that we do not exercise these purchase rights, or are otherwise unable to acquire an interest that would allow us to continue to operate these towers after the applicable period, we will lose the cash flows derived from such

towers. In the event that we decide to exercise these purchase rights, the benefits of the acquisitions of a significant number of towers may not exceed the associated acquisition, compliance and integration costs, which could have a material adverse effect on our business, results of operations or financial condition.

Restrictive covenants in the agreements related to our securitization transactions, our credit facilities and our debt securities could materially and adversely affect our business by limiting flexibility, and we may be prohibited from paying dividends on our common stock if we fail to pay scheduled dividends on our preferred stock, which may jeopardize our qualification for taxation as a REIT.

The agreements related to our securitization transactions include operating covenants and other restrictions customary for loans subject to rated securitizations. Among other things, the borrowers under the agreements are prohibited from incurring other indebtedness for borrowed money or further encumbering their assets. A failure to comply with the covenants in the agreements could prevent the borrowers from taking certain actions with respect to the secured assets and could prevent the borrowers from distributing any excess cash from the operation of such assets to us. If the borrowers were to default on any of the loans, the servicer on such loan could seek to foreclose upon or otherwise convert the ownership of the secured assets, in which case we could lose such assets and the cash flow associated with such assets.

The agreements for our credit facilities also contain restrictive covenants and leverage and other financial maintenance tests that could limit our ability to take various actions, including incurring additional debt, guaranteeing indebtedness or making distributions to stockholders, and engaging in various types of transactions, including mergers, acquisitions and sales of assets. Additionally, our debt agreements restrict our and our subsidiaries’ ability to incur liens securing our or their indebtedness. These covenants could have an adverse effect on our business by limiting our ability to take advantage of financing, new tower development, mergers and acquisitions or other opportunities. If these limits prevent us from satisfying our REIT distribution requirements, we could fail to qualify for taxation as a REIT. Even if these limits do not jeopardize our qualification for taxation as a REIT, they may prevent us from distributing 100% of our REIT taxable income, making us subject to federal corporate income tax, and potentially a nondeductible excise tax, on the retained amounts.

Further, reporting and information covenants in our credit agreements and indentures require that we provide financial and operating information within certain time periods. If we are unable to timely provide the required information, we would be in breach of these covenants. For more information regarding the covenants and requirements discussed above, please see Item 7 of this Annual Report under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Factors Affecting Sources of Liquidity” and note 8 to our consolidated financial statements included in this Annual Report.

Further, the terms of our preferred stock provide that, unless full cumulative dividends have been paid or set aside for payment on all outstanding preferred stock for all prior dividend periods, no dividends may be declared or paid on our common stock. A failure to pay dividends on both our preferred and our common stock might jeopardize our qualification for taxation as a REIT for federal income tax purposes. For more information on the terms of our preferred stock, see note 16 to our consolidated financial statements included in this Annual Report.

Our costs could increase and our revenues could decrease due to perceived health risks from radio emissions, especially if these perceived risks are substantiated.

Public perception of possible health risks associated with cellular and other wireless communications technology could slow the growth of wireless companies, which could in turn slow our growth. In particular, negative public perception of, and regulations regarding, these perceived health risks could undermine the market acceptance of wireless communications services and increase opposition to the development and expansion of tower sites. If a scientific study or court decision resulted in a finding that radio frequency emissions pose health

risks to consumers, it could negatively impact our tenants and the market for wireless services, which could materially and adversely affect our business, results of operations or financial condition. We do not maintain any significant insurance with respect to these matters.

We could have liability under environmental and occupational safety and health laws.

Our operations are subject to the requirements of various federal, state, local and foreign environmental and occupational safety and health laws and regulations, including those relating to the management, use, storage, disposal, emission and remediation of, and exposure to, hazardous and non-hazardous substances, materials and wastes. As the owner, lessee or operator of real property and facilities, we may be liable for substantial costs of investigation, removal or remediation of soil and groundwater contaminated by hazardous materials, and for damages and costs relating to off-site migration of hazardous materials, without regard to whether we, as the owner, lessee or operator, knew of, or were responsible for, the contamination. We may also be liable for certain costs of remediating contamination at third-party sites to which we sent waste for disposal, even if the original disposal may have complied with all legal requirements at the time. Many of these laws and regulations contain information reporting and record keeping requirements. We may not be at all times in compliance with all environmental requirements. We may be subject to potentially significant fines or penalties if we fail to comply with any of these requirements. The requirements of these laws and regulations are complex, change frequently and could become more stringent in the future. In certain jurisdictions these laws and regulations could be applied or enforced retroactively. It is possible that these requirements will change or that liabilities will arise in the future in a manner that could have a material adverse effect on our business, results of operations or financial condition.

Our towers, data centers or computer systems may be affected by natural disasters and other unforeseen events for which our insurance may not provide adequate coverage.

Our towers are subject to risks associated with natural disasters, such as ice and wind storms, tornadoes, floods, hurricanes and earthquakes, as well as other unforeseen events, such as acts of terrorism. Any damage or destruction to our towers or data centers, or certain unforeseen events, may impact our ability to provide services to our tenants.

As part of our normal business activities, we rely on information technology and other computer resources to carry out important operational activities and to maintain our business records. Our computer systems could fail on their own accord and are subject to interruption or damage from power outages, computer and telecommunications failures, computer viruses, security breaches (including through cyber attack and data theft), usage errors, catastrophic events such as natural disasters and other events beyond our control. Although we have disaster recovery programs and security measures in place, if our computer systems and our backup systems are compromised, degraded, damaged, or breached, or otherwise cease to function properly, we could suffer interruptions in our operations or unintentionally allow misappropriation of proprietary or confidential information (including information about our tenants or landlords), which could damage our reputation and require us to incur significant costs to remediate or otherwise resolve these issues.

While we maintain insurance coverage for natural disasters, we may not have adequate insurance to cover the associated costs of repair or reconstruction for a major future event. Further, we carry business interruption insurance, but our insurance may not adequately cover all of our lost revenue, including from new tenants that could have been added to our towers but for the event. If we are unable to provide services to our tenants, it could lead to tenant loss, resulting in a corresponding material adverse effect on our business, results of operations or financial condition.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

ITEM 2.

PROPERTIES

Details of each of our principal offices as of December 31, 2014 are provided below:


Country	Function	Size (approximate square feet)		Property Interest
*Domestic Offices*
Boston, MA	Corporate Headquarters and American Tower International Headquarters		39,800	Leased
Boca Raton, FL	Managed Sites Headquarters		25,200	Leased
Miami, FL	Latin America Operations Center		6,300	Leased
Atlanta, GA	US Tower Division Accounting Headquarters, Network Development, Network Operations and Program Management Office Field Personnel		21,400	Leased
Marlborough, MA	Information Technology Headquarters		20,500	Leased
Woburn, MA	US Tower Division Headquarters, Lease Administration, Site Leasing Management and Broadcast Division Headquarters		149,500	Owned(1)
Cary, NC	US Tower Division, Network Operations Center and Engineering Services Headquarters		43,400	Owned(2)

*International Offices*
Sao Paulo, Brazil	Brazil Headquarters		24,200	Leased
Santiago, Chile	Chile Headquarters		9,200	Leased
Bogota, Colombia	Colombia Headquarters		13,800	Leased
San Jose, Costa Rica	Costa Rica Headquarters		2,400	Leased
Düsseldorf, Germany	Germany Headquarters		8,400	Leased(3)
Accra, Ghana	Ghana Headquarters		18,500	Leased
Delhi, India	India Headquarters		7,200	Leased
Mumbai, India	India Operations Center		13,600	Leased
Mexico City, Mexico	Mexico Headquarters		32,700	Leased
Lima, Peru	Peru Headquarters		3,700	Leased
Johannesburg, South Africa	South Africa Headquarters		16,100	Leased
Kampala, Uganda	Uganda Headquarters		8,800	Leased

(1)	The Woburn facility is approximately 163,200 square feet. Currently, our offices occupy approximately 149,500 square feet. We lease the remaining space to unaffiliated tenants.

(2)	The Cary facility is approximately 48,300 square feet. Currently, our offices occupy approximately 43,400 square feet. We lease the remaining space to an unaffiliated tenant.

(3)	We lease two office spaces that together occupy an aggregate of approximately 8,400 square feet.

In addition to the principal offices set forth above, we maintain offices in the geographic areas we serve through which we operate our tower leasing and services businesses, as well as an office through which we pursue international business development initiatives. We believe that our owned and leased facilities are suitable and adequate to meet our anticipated needs.

As of December 31, 2014, we owned and operated a portfolio of 75,594 communications sites in the United States, Brazil, Chile, Colombia, Costa Rica, Germany, Ghana, India, Mexico, Peru, South Africa and Uganda. In November 2014, we signed an agreement to acquire communications sites in Nigeria. See the table in Item 7 of this Annual Report, under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Overview” for more detailed information on the geographic locations of our communications sites. In addition, we own property interests that we lease to communications service providers and third-party tower operators in the United States, which are included in our domestic rental and management segment.

Domestic Rental and Management Segment. Our interests in our domestic communications sites are comprised of a variety of ownership interests, including leases created by long-term ground lease agreements,

easements, licenses or rights-of-way granted by government entities. Pursuant to the loan agreement for the securitization transaction completed in March 2013 (the “Securitization”), 5,195 towers in the United States are subject to mortgages, deeds of trust and deeds to secure the loan as of December 31, 2014. In addition, 1,517 property interests in the United States are subject to mortgages and deeds of trust to secure three separate classes of Secured Cellular Site Revenue Notes (the “Unison Notes”) assumed in connection with the acquisition of certain legal entities from Unison Holdings LLC and Unison Site Management II, L.L.C. (the “Unison Acquisition”). In connection with our acquisition of MIPT, a private REIT and parent company to Global Tower Partners (“GTP”), we assumed approximately $1.49 billion principal amount of existing indebtedness under six series, consisting of eleven separate classes, of Secured Tower Revenue Notes issued by certain subsidiaries of GTP in several securitization transactions, of which we repaid one series, consisting of two classes, in August 2014 (the remaining notes, the “GTP Notes”). The GTP Notes are secured by, among other things, 2,845 towers and 1,035 property interests and other related assets.

A typical domestic tower site consists of a compound enclosing the tower site, a tower structure and one or more equipment shelters that house a variety of transmitting, receiving and switching equipment. The principal types of our domestic towers are guyed, self-supporting lattice and monopole.

•

A guyed tower includes a series of cables attaching separate levels of the tower to anchor foundations in the ground and can reach heights of up to 2,000 feet. A guyed tower site for a typical broadcast tower can consist of a tract of land of up to 20 acres.

•

A self-supporting lattice tower typically tapers from the bottom up and usually has three or four legs. A lattice tower can reach heights of up to 1,000 feet. Depending on the height of the tower, a lattice tower site for a typical wireless communications tower can consist of a tract of land of 10,000 square feet for a rural site or fewer than 2,500 square feet for a metropolitan site.

•

A monopole tower is a tubular structure that is used primarily to address space constraints or aesthetic concerns. Monopoles typically have heights ranging from 50 to 200 feet. A monopole tower site used in metropolitan areas for a typical wireless communications tower can consist of a tract of land of fewer than 2,500 square feet.

International Rental and Management Segment. Our interests in our international communications sites are comprised of a variety of ownership interests, including leases created by long-term ground lease agreements, easements, licenses or rights-of-way granted by private or government entities. Our financings in Colombia and South Africa are secured by an aggregate of 5,220 towers.

A typical international tower site consists of a compound enclosing the tower site, a tower structure, backup or auxiliary power generators and batteries and one or more equipment shelters that house a variety of transmitting, receiving and switching equipment. The four principal types of our international towers are guyed, self-supporting lattice, monopole and rooftop. Guyed, self-supporting lattice and monopole structures are similar to those in our domestic segment. Rooftop towers are primarily used in metropolitan areas, where locations for traditional tower structures are unavailable. Rooftop towers typically have heights ranging from 10 to 100 feet.

Ground Leases. Of the 75,164 towers in our portfolio as of December 31, 2014, approximately 88% were located on land we lease. Typically, we seek to enter ground leases with terms of twenty to twenty-five years, which are comprised of initial terms of approximately five to ten years with one or more automatic or exercisable renewal periods. As a result, approximately 70% of the ground agreements for our sites have a final expiration date of 2024 and beyond.

Tenants. Our tenants are primarily wireless service providers, broadcasters and other communications service providers. As of December 31, 2014, our four top tenants by total revenue were AT&T Mobility (20%), Sprint Nextel (15%), Verizon Wireless (11%) and T-Mobile USA (10%). In general, our tenant leases have an initial non-cancellable term of ten years, with multiple renewal terms. As a result, approximately 71% of our current tenant leases have a renewal date of 2020 or beyond.

ITEM 3.

LEGAL PROCEEDINGS

We periodically become involved in various claims and lawsuits that are incidental to our business. In the opinion of management, after consultation with counsel, there are no matters currently pending that would, in the event of an adverse outcome, have a material impact on our consolidated financial position, results of operations or liquidity.

ITEM 4.

MINE SAFETY DISCLOSURES

N/A.

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The following table presents reported quarterly high and low per share sale prices of our common stock on the NYSE for the years 2014 and 2013.


2014	High		Low
Quarter ended March 31		$84.90	$	78.38
Quarter ended June 30		90.73		80.10
Quarter ended September 30		99.90		89.05
Quarter ended December 31		106.31		90.20

2013	High		Low
Quarter ended March 31		$79.98	$	72.56
Quarter ended June 30		85.26		69.54
Quarter ended September 30		78.33		67.89
Quarter ended December 31		81.36		71.55

On February 13, 2015, the closing price of our common stock was $96.40 per share as reported on the NYSE. As of February 13, 2015, we had 396,708,636 outstanding shares of common stock and 166 registered holders.

Dividends

As a REIT, we must annually distribute to our stockholders an amount equal to at least 90% of our REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). Generally, we have distributed and expect to continue to distribute all or substantially all of our REIT taxable income after taking into consideration our net operating loss carryforwards (“NOLs”).

In May 2014 we issued the Mandatory Convertible Preferred Stock and subsequently began paying dividends pursuant to the terms thereof. For more information on the Mandatory Convertible Preferred Stock, see Item 7 of this Annual Report under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

The amount, timing and frequency of future distributions will be at the sole discretion of our Board of Directors and will be declared based upon various factors, a number of which may be beyond our control, including our financial condition and operating cash flows, the amount required to maintain our qualification for taxation as a REIT and reduce any income and excise taxes that we otherwise would be required to pay, limitations on distributions in our existing and future debt and preferred equity instruments, our ability to utilize NOLs to offset our distribution requirements, limitations on our ability to fund distributions using cash generated through our TRSs and other factors that our Board of Directors may deem relevant.

Since our conversion to a REIT in 2012, we have distributed an aggregate of approximately $1.3 billion to our common stockholders, including approximately $150.7 million paid in January 2015. These distributions are primarily taxed as ordinary income.

During the year ended December 31, 2014, we declared the following cash distributions:


Declaration Date	Payment Date		Record Date		Distribution per share		Aggregate Payment Amount (in millions)
Common Stock
March 6, 2014		April 25, 2014		April 10, 2014	$	0.32	$	126.6
May 21, 2014		July 16, 2014		June 17, 2014	$	0.34	$	134.6
September 10, 2014		October 7, 2014		September 23, 2014	$	0.36	$	142.7
December 2, 2014		January 13, 2015		December 16, 2014	$	0.38	$	150.7

Preferred Stock
May 21, 2014		August 15, 2014		August 1, 2014	$	1.3563	$	8.1
September 10, 2014		November 17, 2014		November 1, 2014	$	1.3125	$	7.9
December 2, 2014		February 16, 2015		February 1, 2015	$	1.3125	$	7.9

During the year ended December 31, 2013, we declared and paid the following cash distributions:


Declaration Date	Payment Date		Record Date		Distribution per share		Aggregate Payment Amount (in millions)
Common Stock
March 12, 2013		April 25, 2013		April 10, 2013	$	0.26	$	102.8
May 22, 2013		July 16, 2013		June 17, 2013	$	0.27	$	106.7
September 12, 2013		October 7, 2013		September 23, 2013	$	0.28	$	110.5
December 4, 2013		December 31, 2013		December 16, 2013	$	0.29	$	114.5

Performance Graph

This performance graph is furnished and shall not be deemed ‘‘filed’’ with the SEC or subject to Section 18 of the Exchange Act, nor shall it be deemed incorporated by reference in any of our filings under the Securities Act of 1933, as amended.

The following graph compares the cumulative total stockholder return on our common stock with the cumulative total return of the S&P 500 Index, the Dow Jones U.S. Telecommunications Equipment Index and the FTSE NAREIT All Equity REITs Index. The performance graph assumes that on December 31, 2009, $100 was invested in each of our common stock, the S&P 500 Index, the Dow Jones U.S. Telecommunications Equipment Index and the FTSE NAREIT All Equity REITs Index. The cumulative return shown in the graph assumes reinvestment of all dividends. The performance of our common stock reflected below is not necessarily indicative of future performance.

LOGO


	Cumulative Total Returns
	12/09		12/10		12/11		12/12		12/13		12/14
American Tower Corporation	$	100.00	$	119.51	$	139.72	$	182.24	$	190.97	$	240.17
S&P 500 Index		100.00		115.06		117.49		136.30		180.44		205.14
Dow Jones U.S. Telecommunications Equipment Index		100.00		103.30		95.14		104.42		126.80		146.09
FTSE NAREIT All Equity REITs Index		100.00		127.95		138.55		165.84		170.58		218.38

ITEM 6.

SELECTED FINANCIAL DATA

The selected financial data should be read in conjunction with our “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our audited consolidated financial statements and the related notes to those consolidated financial statements included in this Annual Report.

Year-over-year comparisons are significantly affected by our acquisitions, dispositions and construction of towers. Our acquisition of MIPT, which closed in October 2013, significantly impacts the comparability of reported results between periods. Our principal acquisitions are described in note 6 to our consolidated financial statements included in this Annual Report.


	Year Ended December 31,
	2014			2013			2012			2011			2010
	(In thousands, except per share data)
Statements of Operations Data:
Revenues:
Rental and management	$	4,006,854		$	3,287,090		$	2,803,490		$	2,386,185		$	1,936,373
Network development services		93,194			74,317			72,470			57,347			48,962

Total operating revenues		4,100,048			3,361,407			2,875,960			2,443,532			1,985,335

Operating expenses:
Cost of operations (exclusive of items shown separately below)
Rental and management(1)		1,056,177			828,742			686,681			590,272			447,629
Network development services(2)		38,088			31,131			35,798			30,684			26,957
Depreciation, amortization and accretion		1,003,802			800,145			644,276			555,517			460,726
Selling, general, administrative and development expense(3)		446,542			415,545			327,301			288,824			229,769
Other operating expenses		68,517			71,539			62,185			58,103			35,876

Total operating expenses		2,613,126			2,147,102			1,756,241			1,523,400			1,200,957

Operating income		1,486,922			1,214,305			1,119,719			920,132			784,378
Interest income, TV Azteca, net		10,547			22,235			14,258			14,214			14,212
Interest income		14,002			9,706			7,680			7,378			5,024
Interest expense		(580,234	)		(458,296	)		(401,665	)		(311,854	)		(246,018	)
Loss on retirement of long-term obligations		(3,473	)		(38,701	)		(398	)		—			(1,886	)
Other (expense) income(4)		(62,060	)		(207,500	)		(38,300	)		(122,975	)		315

Income from continuing operations before income taxes and income on equity method investments		865,704			541,749			701,294			506,895			556,025
Income tax provision		(62,505	)		(59,541	)		(107,304	)		(125,080	)		(182,489	)
Income on equity method investments		—			—			35			25			40

Income from continuing operations		803,199			482,208			594,025			381,840			373,576
Income from discontinued operations, net		—			—			—			—			30

Net income		803,199			482,208			594,025			381,840			373,606
Net loss (income) attributable to noncontrolling interest		21,711			69,125			43,258			14,622			(670	)

Net income attributable to American Tower Corporation stockholders		824,910			551,333			637,283			396,462			372,936
Dividends declared on preferred stock		(23,888	)		—			—			—			—

Net income attributable to American Tower Corporation common stockholders	$	801,022		$	551,333		$	637,283		$	396,462		$	372,936

Net income per common share amounts:
Basic net income attributable to American Tower Corporation common stockholders(5)	$	2.02		$	1.40		$	1.61		$	1.00		$	0.93

Diluted net income attributable to American Tower Corporation common stockholders(5)	$	2.00		$	1.38		$	1.60		$	0.99		$	0.92

Weighted average common shares outstanding:(5)
Basic		395,958			395,040			394,772			395,711			401,152
Diluted		400,086			399,146			399,287			400,195			404,072

Distribution declared per common share	$	1.40		$	1.10		$	0.90		$	0.35		$	—

Distribution declared per preferred share	$	3.98		$	—		$	—		$	—		$	—

Other Operating Data:
Ratio of earnings to fixed charges(6)		2.11x			1.89x			2.32x			2.19x			2.65x
Ratio of earnings to combined fixed charges and preferred stock dividends(6)		2.05x			1.89x			2.32x			2.19x			2.65x


	As of December 31,
	2014		2013		2012		2011		2010
	(In thousands)
Balance Sheet Data:(7)
Cash and cash equivalents (including restricted cash)(8)	$	473,698	$	446,492	$	437,934	$	372,406	$	959,935
Property and equipment, net		7,626,817		7,177,728		5,765,856		4,981,722		3,683,474
Total assets		21,331,545		20,283,665		14,089,429		12,242,395		10,370,084
Long-term obligations, including current portion		14,608,708		14,478,278		8,753,376		7,236,308		5,587,388
Total American Tower Corporation equity		3,953,560		3,534,165		3,573,101		3,287,220		3,501,444

(1)	For the years ended December 31, 2014, 2013, 2012 and 2011, amount includes approximately $1.4 million, $1.0 million, $0.8 million and $1.1 million, respectively, of stock-based compensation expense. For the year ended December 31, 2010, there was no stock-based compensation expense included.

(2)	For the years ended December 31, 2014, 2013, 2012 and 2011, amount includes approximately $0.4 million, $0.6 million, $1.0 million and $1.2 million, respectively, of stock-based compensation expense. For the year ended December 31, 2010, there was no stock-based compensation expense included.

(3)	For the years ended December 31, 2014, 2013, 2012, 2011 and 2010, amount includes approximately $78.3 million, $66.6 million, $50.2 million, $45.1 million and $52.6 million, respectively, of stock-based compensation expense.

(4)	For the years ended December 31, 2014, 2013, 2012, 2011 and 2010, amount includes unrealized foreign currency (losses) gains of approximately $(49.3) million, $(211.7) million, $(34.3) million, $(131.1) million and $4.8 million, respectively.

(5)

Basic net income per common share represents net income attributable to American Tower Corporation common stockholders divided by the weighted average number of common shares outstanding during the period. Diluted net income per common share represents net income attributable to American Tower Corporation common stockholders divided by the weighted average number of common shares outstanding during the period and any dilutive common share equivalents, including shares issuable (i) upon the vesting of restricted stock awards, (ii) upon exercise of stock options and (iii) upon conversion of the Mandatory Convertible Preferred Stock. Dilutive common share equivalents also include the dilutive impact of the ALLTEL transaction (see notes 16 and 19 to our consolidated financial statements included in this Annual Report). We use the treasury stock method to calculate the effect of the outstanding restricted stock awards and stock options and use the if-converted method to calculate the effect of the outstanding Mandatory Convertible Preferred Stock.

(6)

For the purpose of this calculation, “earnings” consists of income from continuing operations before income taxes and income on equity method investments, as well as fixed charges (excluding interest capitalized and amortization of interest capitalized). “Fixed charges” consists of interest expensed and capitalized, amortization of debt discounts, premiums and related issuance costs and the component of rental expense associated with operating leases believed by management to be representative of the interest factor thereon.

(7)	Balances have been revised to reflect purchase accounting measurement period adjustments.

(8)

As of December 31, 2014, 2013, 2012, 2011 and 2010, amount includes approximately $160.2 million, $152.9 million, $69.3 million, $42.2 million and $76.0 million, respectively, of restricted funds pledged as collateral to secure obligations and cash, the use of which is otherwise limited by contractual provisions.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The discussion and analysis of our financial condition and results of operations that follow are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses and the related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may differ significantly from these estimates under different assumptions or conditions. This discussion should be read in conjunction with our consolidated financial statements included in this Annual Report and the accompanying notes, and the information set forth under the caption “Critical Accounting Policies and Estimates” below.

Our continuing operations are reported in three segments: domestic rental and management, international rental and management and network development services. In evaluating operating performance in each business segment, management uses, among other factors, segment gross margin and segment operating profit. We define segment gross margin as segment revenue less segment operating expenses, excluding stock-based compensation expense recorded in costs of operations; Depreciation, amortization and accretion; Selling, general, administrative and development expense; and Other operating expense. We define segment operating profit as segment gross margin less Selling, general, administrative and development expense attributable to the segment, excluding stock-based compensation expense and corporate expenses. Segment gross margin and segment operating profit for the international rental and management segment also include Interest income, TV Azteca, net (see note 21 to our consolidated financial statements included in this Annual Report). These measures of segment gross margin and segment operating profit are also before Interest income, Interest expense, Gain (loss) on retirement of long-term obligations, Other income (expense), Net income (loss) attributable to noncontrolling interest, Income (loss) on equity method investments and Income tax benefit (provision).

Executive Overview

We are a global independent owner, operator and developer of communications real estate. Our primary business is the leasing of space on multi-tenant communications sites to wireless service providers, radio and television broadcast companies, wireless data and data providers, government agencies and municipalities and tenants in a number of other industries. In addition to the communications sites in our portfolio, we manage rooftop and tower sites for property owners under various contractual arrangements. We also hold property interests that we lease to communications service providers and third-party tower operators. We refer to this business as our rental and management operations, which accounted for approximately 98% of our total revenues for the year ended December 31, 2014 and includes our domestic rental and management segment and our international rental and management segment. Through our network development services, we offer tower-related services domestically, including site acquisition, zoning and permitting services and structural analysis services, which primarily support our site leasing business and the addition of new tenants and equipment on our sites, including in connection with provider network upgrades. We operate as a REIT for U.S. federal income tax purposes.

The following table details the number of communications sites, excluding managed sites, we owned or operated as of December 31, 2014:


Country	Number of Owned Sites		Number of Operated Sites(1)
United States		21,722		7,164
International(2):
Brazil		9,642		2,268
Chile		1,161
Colombia		2,884		706
Costa Rica		464
Germany		2,031
Ghana		2,049
India		12,999
Mexico		8,551		199
Peru		571
South Africa		1,918
Uganda		1,265

(1)	All of the communications sites we operate are held pursuant to long-term capital leases, including those subject to purchase options.

(2)	In September 2014, we completed the sale of the operations in Panama.

On February 5, 2015, we signed a definitive agreement for the Proposed Verizon Transaction, pursuant to which we expect to acquire the exclusive right to lease, acquire or otherwise operate and manage up to 11,489 wireless communications sites in the United States for $5.056 billion in cash at closing, subject to certain conditions and limited adjustments.

The majority of our tenant leases with wireless carriers have an initial non-cancellable term of ten years, with multiple renewal terms. Accordingly, nearly all of the revenue generated by our rental and management operations during the year ended December 31, 2014 was recurring revenue that we should continue to receive in future periods. Based upon foreign currency exchange rates and the tenant leases in place as of December 31, 2014, we expect to generate approximately $27 billion of non-cancellable tenant lease revenue over future periods, absent the impact of straight-line lease accounting. Most of our tenant leases have provisions that periodically increase the rent due under the lease, typically annually based on a fixed escalation (approximately 3.0% in the United States) or an inflationary index in our international markets, or a combination of both. In addition, certain of our tenant leases provide for additional revenue to cover costs, such as ground rent or power and fuel costs.

The revenues generated by our rental and management operations may also be affected by cancellations of existing tenant leases. As discussed above, most of our tenant leases with wireless carriers and broadcasters are multi-year contracts, which typically are non-cancellable; however in some instances, a lease may be canceled upon the payment of a termination fee.

Revenue lost from either cancellations of leases at the end of their terms or rent negotiations historically has not had a material adverse effect on the revenues generated by our rental and management operations. During the year ended December 31, 2014, loss of revenue from tenant lease cancellations or renegotiations represented approximately 1.5% of our rental and management operations revenues.

Rental and Management Operations Revenue Growth. Due to our diversified communications site portfolio, our tenant lease rates vary considerably depending upon numerous factors, including, but not limited to, amount and type of tenant equipment on the tower, ground space required by the tenant, remaining tower capacity and

tower location. We measure the remaining tower capacity by assessing several factors, including tower height, tower type, environmental conditions, existing equipment on the tower and zoning and permitting regulations in effect in the jurisdiction where the tower is located. In many instances, tower capacity can be increased through tower augmentation.

The primary factors affecting the revenue growth in our domestic and international rental and management segments are:

•

Recurring organic revenue, which is revenue from tenant leases attributable to sites that existed in our portfolio as of the beginning of the prior year period (“legacy sites”);

•

Contractual rent escalations on existing tenant leases, net of cancellations;

•

New revenue attributable to leasing additional space on our legacy sites; and

•

New revenue attributable to sites acquired or constructed since the beginning of the prior year period (“new sites”).

We continue to believe that our site leasing revenue is likely to increase due to the growing use of wireless communications services and our ability to meet the corresponding incremental demand for our wireless real estate. By adding new tenants and new equipment for existing tenants on our sites, we are able to increase these sites’ utilization and profitability. We believe the majority of our site leasing activity will continue to come from wireless service providers. Our legacy site portfolio and our established tenant base provide us with new business opportunities, which have historically resulted in consistent and predictable organic revenue growth as wireless carriers seek to increase the coverage and capacity of their existing networks, while also deploying next generation wireless technologies. In addition, consistent with our signing of a definitive agreement for the Proposed Verizon Transaction, we intend to continue to supplement the organic growth on our legacy sites by selectively developing or acquiring new sites in our existing and in new markets where we can achieve our risk-adjusted return on investment objectives. In a majority of our international markets, revenue also includes the reimbursement of direct costs such as ground rent or power and fuel costs.

Rental and Management Operations Organic Revenue Growth. Consistent with our strategy to increase the utilization and return on investment of our legacy sites, our objective is to add new tenants and new equipment for existing tenants through collocation and lease amendments. Our ability to lease additional space on our sites is primarily a function of the rate at which wireless carriers deploy capital to improve and expand their wireless networks. This rate, in turn, is influenced by the growth of wireless communications services, the penetration of advanced wireless devices, the financial performance of our tenants and their access to capital, and general economic conditions. The following key trends within each market that we serve provide opportunities for organic revenue growth:

•

Domestic. As a result of the rapid subscriber adoption of bandwidth-intensive wireless data applications and advanced wireless devices, wireless service providers in the United States continue to invest in their wireless networks by adding new cell sites as well as additional equipment to their existing cell sites. Growth in wireless data demand has driven wireless providers in the United States to deploy increasing levels of annual wireless capital investment and as a result, we have experienced strong demand for our communications sites.

Based on industry research and projections, we expect the following key industry trends will result in incremental revenue opportunities for us:

•

The deployment of advanced wireless technology across existing wireless networks will provide higher speed data services and enable fixed broadband substitution. As a result, we expect our tenants to continue deploying additional equipment across their existing networks.

•

Wireless service providers compete based on the quality of their existing wireless networks, which is driven by capacity and coverage. To maintain or improve their network performance as overall network usage increases, our tenants continue deploying additional equipment across their

existing sites while also adding new cell sites. We anticipate increasing network densification over the next several years, as existing network infrastructure is anticipated to be insufficient to account for rapidly increasing levels of wireless data usage.

•

Wireless service providers are also investing in reinforcing their networks through incremental backhaul and the utilization of on-site generators, which typically results in additional equipment or space leased at the tower site, and incremental revenue.

•

Wireless service providers continue to acquire additional spectrum, and as a result are expected to add additional sites and equipment to their network as they seek to optimize their network configuration.

We have entered into holistic master lease agreements with three of our four largest tenants in the United States, which provide for consistent, long-term revenue and a reduction in the likelihood of churn. Typically, these agreements include built-in annual escalators, fixed annual charges which permit our tenants to place a pre-determined amount of equipment on certain of our sites and provisions for incremental lease payments if the equipment levels are exceeded. Our holistic master lease agreements build and augment strong strategic partnerships with our tenants and have significantly reduced collocation cycle times, thereby providing our tenants with the ability to rapidly and efficiently deploy equipment on our sites.

•

International. As part of our international expansion initiatives, we have targeted markets in various stages of network development in order to diversify our international exposure and position us to benefit from a number of different wireless technology deployments over the long term. In addition, we have focused on building relationships with large multinational carriers such as MTN Group Limited, Telefónica S.A., Vodafone Group PLC and Bharti Airtel Limited. We believe that consistent carrier investments in their networks across our international markets position us to generate meaningful organic revenue growth going forward.

In emerging markets such as Ghana, India and Uganda, wireless networks tend to be significantly less advanced than those in the United States, and initial voice networks continue to be deployed in underdeveloped areas. In more developed urban locations within these markets, early-stage data network deployments are underway. Carriers are focused on completing voice network build-outs while also investing in initial data networks as wireless data usage and smartphone penetration within their customer bases begin to accelerate.

In markets with rapidly evolving network technology, such as South Africa and most of the countries in Latin America where we do business, initial voice networks, for the most part, have already been built out, and carriers are focused on third generation (3G) network build outs and augmentations, with select initial investments in fourth generation (4G) technology. Recent spectrum auctions in these rapidly evolving markets have allowed incumbent carriers to accelerate their data network deployments and have also enabled new entrants to begin initial investments in data networks. Smartphone penetration and wireless data usage in these markets are growing rapidly, which mandates that carriers continue to invest in their networks in order to maintain and augment their quality of service.

Finally, in markets with more mature network technology such as Germany, carriers are focused on deploying 4G data networks to account for rapidly increasing wireless data usage. With a more mature customer base, higher smartphone penetration and significantly higher per capita data usage, carrier investment in networks is focused on 4G coverage and capacity.

We believe that the network technology migration we have seen in the United States, which has led to significantly denser networks and meaningful new business commencements for us over a number of years, will ultimately be replicated in our less advanced international markets. As a result, we expect to be able to leverage our extensive international portfolio of approximately 46,700 communications sites and the relationships we have built with our carrier customers to drive sustainable, long-term growth.

Rental and Management Operations New Site Revenue Growth. During the year ended December 31, 2014, we grew our portfolio of communications real estate through the acquisition and construction of approximately 8,450 sites. In a majority of our international markets, the acquisition or construction of new sites results in increased pass-through revenues (such as ground rent or power and fuel costs) and expenses. We continue to evaluate opportunities to acquire communications real estate portfolios, both domestically and internationally, to determine whether they meet our risk-adjusted hurdle rates and whether we believe we can effectively integrate them into our existing portfolio.


New Sites (Acquired or Constructed)	2014		2013		2012
Domestic		900		5,260		960
International(1)		7,550		7,810		7,850

(1)	The majority of sites acquired or constructed in 2014 were in Brazil, India and Mexico; in 2013 were in Brazil, Colombia, Costa Rica, India, Mexico and South Africa; and in 2012 were in Brazil, Germany, India and Uganda.

Rental and Management Operations Expenses. Direct operating expenses incurred by our domestic and international rental and management segments include direct site level expenses and consist primarily of ground rent and power and fuel costs, some of which may be passed through to our tenants, as well as property taxes, repairs and maintenance. These segment direct operating expenses exclude all segment and corporate selling, general, administrative and development expenses, which are aggregated into one line item entitled Selling, general, administrative and development expense in our consolidated statements of operations. In general, our domestic and international rental and management segments’ selling, general, administrative and development expenses do not significantly increase as a result of adding incremental tenants to our legacy sites and typically increase only modestly year-over-year. As a result, leasing additional space to new tenants on our legacy sites provides significant incremental cash flow. We may, however, incur additional segment selling, general, administrative and development expenses as we increase our presence in geographic areas where we have recently launched operations or are focused on expanding our portfolio. Our profit margin growth is therefore positively impacted by the addition of new tenants to our legacy sites and can be temporarily diluted by our development activities.

Network Development Services Segment Revenue Growth. As we continue to focus on growing our rental and management operations, we anticipate that our network development services revenue will continue to represent a small percentage of our total revenues.

Non-GAAP Financial Measures

Included in our analysis of our results of operations are discussions regarding earnings before interest, taxes, depreciation, amortization and accretion, as adjusted (“Adjusted EBITDA”), Funds From Operations, as defined by the National Association of Real Estate Investment Trusts (“NAREIT FFO”) and Adjusted Funds From Operations (“AFFO”).

We define Adjusted EBITDA as Net income before Income (loss) on discontinued operations, net; Income (loss) on equity method investments; Income tax benefit (provision); Other income (expense); Gain (loss) on retirement of long-term obligations; Interest expense; Interest income; Other operating income (expense); Depreciation, amortization and accretion; and stock-based compensation expense.

NAREIT FFO is defined as net income before gains or losses from the sale or disposal of real estate, real estate related impairment charges, real estate related depreciation, amortization and accretion and dividends declared on preferred stock, and including adjustments for (i) unconsolidated affiliates and (ii) noncontrolling interest.

We define AFFO as NAREIT FFO before (i) straight-line revenue and expense; (ii) stock-based compensation expense; (iii) the non-cash portion of our tax provision; (iv) non-real estate related depreciation, amortization and accretion; (v) amortization of deferred financing costs, capitalized interest, debt discounts and premiums and long-term deferred interest charges; (vi) other income (expense); (vii) gain (loss) on retirement of long-term obligations; (viii) other operating income (expense); and adjustments for (ix) unconsolidated affiliates and (x) noncontrolling interest, less cash payments related to capital improvements and cash payments related to corporate capital expenditures.

Adjusted EBITDA, NAREIT FFO and AFFO are not intended to replace net income or any other performance measures determined in accordance with GAAP. Neither NAREIT FFO nor AFFO represent cash flows from operating activities in accordance with GAAP and, therefore, these measures should not be considered indicative of cash flows from operating activities as a measure of liquidity or of funds available to fund our cash needs, including our ability to make cash distributions. Rather, Adjusted EBITDA, NAREIT FFO and AFFO are presented as we believe each is a useful indicator of our current operating performance. We believe that these metrics are useful to an investor in evaluating our operating performance because (1) each is a key measure used by our management team for purposes of decision making and for evaluating the performance of our operating segments; (2) Adjusted EBITDA is a component of the calculation used by our lenders to determine compliance with certain debt covenants; (3) Adjusted EBITDA is widely used in the tower industry to measure operating performance as depreciation, amortization and accretion may vary significantly among companies depending upon accounting methods and useful lives, particularly where acquisitions and non-operating factors are involved; (4) each provides investors with a meaningful measure for evaluating our period-to-period operating performance by eliminating items that are not operational in nature; and (5) each provides investors with a measure for comparing our results of operations to those of other companies.

Our measurement of Adjusted EBITDA, NAREIT FFO and AFFO may not, however, be fully comparable to similarly titled measures used by other companies. Reconciliations of Adjusted EBITDA, NAREIT FFO and AFFO to net income, the most directly comparable GAAP measure, have been included below.

Results of Operations

Years Ended December 31, 2014 and 2013

(in thousands, except percentages)

Revenue


	Year Ended December 31,				Amount of Increase (Decrease)		Percent Increase (Decrease)
	2014		2013		Amount of Increase (Decrease)		Percent Increase (Decrease)
Rental and management
Domestic	$	2,639,790	$	2,189,365	$	450,425		21	%
International		1,367,064		1,097,725		269,339		25

Total rental and management		4,006,854		3,287,090		719,764		22
Network development services		93,194		74,317		18,877		25

Total revenues	$	4,100,048	$	3,361,407	$	738,641		22	%

The increase in total revenues was primarily attributable to an increase in both of our rental and management segments, including organic revenue growth attributable to our legacy sites and revenue growth attributable to the approximately 21,520 new sites that we have constructed or acquired since January 1, 2013. Approximately $260.6 million of the increase was attributable to revenues generated by MIPT.

Domestic rental and management segment revenue growth for the year ended December 31, 2014 was comprised of:

•

Revenue growth of approximately 11%, attributable to the addition of approximately 4,860 domestic sites, as well as managed rooftop and tower sites and land interests under third-party sites, in connection with our acquisition of MIPT;

•

Revenue growth from legacy sites of approximately 9%, including approximately 8% primarily generated by new tenant leases and amendments to existing tenant leases and approximately 1% attributable to contractual rent escalations, net of tenant lease cancellations;

•

Revenue growth of over 2% from approximately 1,300 new sites, as well as land interests under third-party sites, constructed or acquired since January 1, 2013 (excluding MIPT); and

•

A decrease of approximately 1% from the impact of straight-line lease accounting.

International rental and management segment revenue growth for the year ended December 31, 2014 was comprised of:

•

Revenue growth of approximately 20% from approximately 15,360 new sites constructed or acquired since January 1, 2013 (including approximately 460 sites in Costa Rica in connection with our acquisition of MIPT);

•

Revenue growth from legacy sites of approximately 15%, which includes approximately 12% due to incremental revenue primarily generated from new tenant leases and amendments to existing tenant leases and approximately 3% attributable to contractual rent escalations, net of tenant lease cancellations;

•

Revenue growth of approximately 1% from the impact of straight-line lease accounting; and

•

A decrease of approximately 11% attributable to the negative impact from foreign currency translation, which includes, among others, the negative impact of approximately 4% related to fluctuations in Ghanaian Cedi (“GHS”), approximately 3% related to fluctuations in Brazilian Reais (“BRL”) and approximately 1% related to fluctuations in Mexican Peso (“MXN”).

Network development services segment revenue growth for the year ended December 31, 2014 was primarily due to an increase in site acquisition, zoning and permitting services associated with certain tenants’ next generation technology network upgrade projects, including an increase in volume as a result of the additional sites acquired as part of the acquisition of MIPT.

Gross Margin


	Year Ended December 31,				Amount of Increase (Decrease)		Percent Increase (Decrease)
	2014		2013		Amount of Increase (Decrease)		Percent Increase (Decrease)
Rental and management
Domestic	$	2,124,048	$	1,783,946	$	340,102		19	%
International		838,573		697,614		140,959		20

Total rental and management		2,962,621		2,481,560		481,061		19
Network development services		55,546		43,753		11,793		27	%

Domestic rental and management segment gross margin growth for the year ended December 31, 2014 was comprised of:

•

Gross margin growth of approximately 10% attributable to the addition of approximately 4,860 domestic sites, as well as managed rooftop and tower sites and land interests under third-party sites, in connection with our acquisition of MIPT;

•

Gross margin growth from legacy sites of approximately 9%, primarily associated with the increase in revenue, as described above;

•

Gross margin growth from new sites (excluding MIPT) of over 2%, primarily associated with the increase in revenue, as described above; and

•

A decrease of approximately 2% from the impact of straight-line lease accounting.

International rental and management segment gross margin growth for the year ended December 31, 2014 was comprised of:

•

Gross margin growth from new sites (including MIPT) of approximately 15%, primarily associated with the increase in revenue, as described above;

•

Gross margin growth from legacy sites of approximately 13%, primarily associated with the increase in revenue, as described above, which includes the negative impact of approximately 1% as a result of the early termination of a portion of the notes receivable with TV Azteca, which provided a positive impact to 2013 gross margin;

•

Gross margin growth of approximately 2% from the impact of straight-line lease accounting; and

•

A decrease of approximately 10% attributable to the negative impact from foreign currency translation, which includes, among others, the negative impact of approximately 3% related to fluctuations in GHS, approximately 3% related to fluctuations in BRL and approximately 1% related to fluctuations in MXN.

Network development services segment gross margin growth for the year ended December 31, 2014 was primarily due to the increase in revenue as described above.

Selling, General, Administrative and Development Expense


	Year Ended December 31,				Amount of Increase (Decrease)			Percent Increase (Decrease)
	2014		2013		Amount of Increase (Decrease)			Percent Increase (Decrease)
Rental and management
Domestic	$	124,944	$	103,989	$	20,955			20	%
International		133,978		123,338		10,640			9

Total rental and management		258,922		227,327		31,595			14
Network development services		12,469		9,257		3,212			35
Other		175,151		178,961		(3,810	)		(2	)

Total selling, general, administrative and development expense	$	446,542	$	415,545	$	30,997			7	%

The increase in domestic rental and management segment selling, general, administrative and development expense (“SG&A”) for the year ended December 31, 2014 was primarily driven by increasing personnel costs to support our business, including additional costs associated with the acquisition of MIPT, as well as an increase of approximately $11.0 million associated with project cancellation costs.

The increase in international rental and management segment SG&A for the year ended December 31, 2014 was primarily due to the impact of increased personnel costs to support our business, including additional costs associated with acquisitions, partially offset by decreases attributable to impacts of foreign currency fluctuations, as well as the reversal of bad debt expense for amounts previously reserved.

The increase in network development services segment SG&A for the year ended December 31, 2014 was primarily due to higher personnel costs related to the additional site acquisition, zoning and permitting services associated with certain tenants’ next generation technology network upgrade projects, including an increase in volume as a result of the additional sites acquired as part of the acquisition of MIPT.

The decrease in other SG&A for the year ended December 31, 2014 was primarily due to a decrease in corporate SG&A of $15.5 million, which was partially offset by an increase of $11.7 million related to stock-based compensation expense. The decrease in corporate SG&A was primarily related to a reduction in legal expenses of $22.5 million, including the recovery of expenses during the year ended December 31, 2014, and the reversal of a $2.8 million reserve associated with a non-recurring state tax item. The decrease in corporate SG&A was partially offset by an increase in personnel costs to support our business.

Operating Profit


	Year Ended December 31,				Amount of Increase (Decrease)		Percent Increase (Decrease)
	2014		2013		Amount of Increase (Decrease)		Percent Increase (Decrease)
Rental and management
Domestic	$	1,999,104	$	1,679,957	$	319,147		19	%
International		704,595		574,276		130,319		23

Total rental and management		2,703,699		2,254,233		449,466		20
Network development services		43,077		34,496		8,581		25	%

Domestic rental and management segment operating profit growth for the year ended December 31, 2014 was primarily attributable to an increase in our domestic rental and management segment gross margin (19%) and was partially offset by an increase in our domestic rental and management segment SG&A (20%).

International rental and management segment operating profit growth for the year ended December 31, 2014 was primarily attributable to an increase in our international rental and management segment gross margin (20%) and was partially offset by an increase in our international rental and management segment SG&A (9%).

Network development services segment operating profit growth for the year ended December 31, 2014 was primarily attributable to an increase in network development services segment gross margin (27%) and was partially offset by an increase in our network development services segment SG&A (35%).

Depreciation, Amortization and Accretion


	Year Ended December 31,				Amount of Increase (Decrease)		Percent Increase (Decrease)
	2014		2013		Amount of Increase (Decrease)		Percent Increase (Decrease)
Depreciation, amortization and accretion	$	1,003,802	$	800,145	$	203,657		25	%

The increase in Depreciation, amortization and accretion expense for the year ended December 31, 2014 was primarily attributable to the depreciation, amortization and accretion expense associated with the acquisition or construction of approximately 21,520 sites since January 1, 2013, which resulted in an increase in property and equipment and intangible assets subject to amortization.

Other Operating Expenses


	Year Ended December 31,				Amount of Increase (Decrease)			Percent Increase (Decrease)
	2014		2013		Amount of Increase (Decrease)			Percent Increase (Decrease)
Other operating expenses	$	68,517	$	71,539	$	(3,022	)		(4	)%

The decrease in Other operating expenses for the year ended December 31, 2014 was primarily attributable to a decrease of $4.0 million from impairment charges and net losses on sales or disposals of long-lived assets and was partially offset by a net increase of $2.4 million in integration, acquisition and merger related costs.

Interest Income, TV Azteca, net


	Year Ended December 31,				Amount of Increase (Decrease)			Percent Increase (Decrease)
	2014		2013		Amount of Increase (Decrease)			Percent Increase (Decrease)
Interest income, TV Azteca, net	$	10,547	$	22,235	$	(11,688	)		(53	)%

During the year ended December 31, 2013, we received a payment from TV Azteca, which included $28.0 million of principal on the notes receivable from TV Azteca, related interest and a prepayment penalty of $4.9 million. In addition, we recorded additional interest income of $2.7 million related to the write-off of a portion of the unamortized discount associated with the original notes receivable.

Interest Expense


	Year Ended December 31,				Amount of Increase (Decrease)		Percent Increase (Decrease)
	2014		2013		Amount of Increase (Decrease)		Percent Increase (Decrease)
Interest expense	$	580,234	$	458,296	$	121,938		27	%

The increase in Interest expense for the year ended December 31, 2014 was primarily attributable to an increase of $3.9 billion in our average debt outstanding, partially offset by a decrease in our annualized weighted average cost of borrowing from 4.40% to 4.06%. The weighted average contractual interest rate was 4.02% at December 31, 2014.

Loss on Retirement of Long-Term Obligations


	Year Ended December 31,				Amount of Increase (Decrease)			Percent Increase (Decrease)
	2014		2013		Amount of Increase (Decrease)			Percent Increase (Decrease)
Loss on retirement of long-term obligations	$	3,473	$	38,701	$	(35,228	)		(91	)%

During the year ended December 31, 2014, we paid prepayment consideration, which was partially offset by the write-off of unamortized premium associated with the fair value adjustments of assumed debt, in connection with our (i) repayment of an aggregate of $568.3 million in assumed debt, including debt assumed in connection with our acquisition of MIPT, and (ii) acquisition of the outstanding preferred stock of BR Towers. In addition, we recorded a loss of approximately $1.4 million as a result of settling our previously existing interest rate swap agreement related to a previously existing Colombian Peso (“COP”) denominated long-term credit facility entered into in October 2012 (the “Colombian Long-Term Credit Facility”).

During the year ended December 31, 2013, we recorded a loss of $35.3 million due to the repayment of the $1.75 billion outstanding balance of the Commercial Mortgage Pass-Through Certificates, Series 2007-1 (the “Certificates”) issued in the securitization transaction completed in May 2007 and incurred prepayment consideration and recorded the acceleration of deferred financing costs. In addition, during the year ended December 31, 2013, we recorded a loss of $3.4 million related to the acceleration of the remaining deferred financing costs associated with our $1.0 billion revolving credit facility entered into in April 2011 (the “2011 Credit Facility”), which was terminated in June 2013, and our $750.0 million unsecured term loan entered into in June 2012 (the “2012 Term Loan”), which was terminated in October 2013.

Other Expense


	Year Ended December 31,				Amount of Increase (Decrease)			Percent Increase (Decrease)
	2014		2013		Amount of Increase (Decrease)			Percent Increase (Decrease)
Other expense	$	62,060	$	207,500	$	(145,440	)		(70	)%

During the year ended December 31, 2014, other expense reflected $49.3 million of unrealized foreign currency losses, as compared to $211.7 million of unrealized foreign currency losses during the year ended December 31, 2013. We record unrealized foreign currency gains or losses as a result of fluctuations in the foreign currency exchange rates primarily associated with our intercompany notes and similar unaffiliated balances denominated in a currency other than the subsidiaries’ functional currencies. During the year ended December 31, 2014, we recorded unrealized foreign currency losses of $468.6 million, of which $419.3 million was recorded in Accumulated other comprehensive income (loss) (“AOCI”) and $49.3 million was recorded in Other expense (see note 1 to the consolidated financial statements included in this Annual Report).

Income Tax Provision


	Year Ended December 31,						Amount of Increase (Decrease)		Percent Increase (Decrease)
	2014			2013			Amount of Increase (Decrease)		Percent Increase (Decrease)
Income tax provision	$	62,505		$	59,541		$	2,964		5	%
Effective tax rate		7.2	%		11.0	%

The effective tax rate (“ETR”) during the year ended December 31, 2013 included nonrecurring expense due to the restructuring of our domestic TRSs.

As a REIT, we may deduct earnings distributed to stockholders against the income generated in our QRSs. In addition, we are able to offset income in both our TRSs and QRSs by utilizing our NOLs, subject to specified limitations.

The ETR on income from continuing operations for the years ended December 31, 2014 and 2013 differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.

Net Income/Adjusted EBITDA


	Year Ended December 31,						Amount of Increase (Decrease)			Percent Increase (Decrease)
	2014			2013			Amount of Increase (Decrease)			Percent Increase (Decrease)
Net income	$	803,199		$	482,208		$	320,991			67	%
Income tax provision		62,505			59,541			2,964			5
Other expense		62,060			207,500			(145,440	)		(70	)
Loss on retirement of long-term obligations		3,473			38,701			(35,228	)		(91	)
Interest expense		580,234			458,296			121,938			27
Interest income		(14,002	)		(9,706	)		4,296			44
Other operating expenses		68,517			71,539			(3,022	)		(4	)
Depreciation, amortization and accretion		1,003,802			800,145			203,657			25
Stock-based compensation expense		80,153			68,138			12,015			18

Adjusted EBITDA	$	2,649,941		$	2,176,362		$	473,579			22	%

The increase in net income for the year ended December 31, 2014 was primarily due to the increase in our operating profit, as well as decreases in other expense and loss on retirement of long-term obligations. The increase in net income was partially offset by increases in depreciation, amortization and accretion expense, interest expense and stock-based compensation expense.

The increase in Adjusted EBITDA for the year ended December 31, 2014 was primarily attributable to the increase in our gross margin, and was partially offset by an increase in SG&A of $19.3 million, excluding the impact of stock-based compensation expense.

Net Income/NAREIT FFO/AFFO


	Year Ended December 31,						Amount of Increase (Decrease)			Percent Increase (Decrease)
	2014			2013			Amount of Increase (Decrease)			Percent Increase (Decrease)
Net income	$	803,199		$	482,208		$	320,991			67	%
Real estate related depreciation, amortization and accretion		878,714			701,292			177,422			25
Losses from sale or disposal of real estate and real estate related impairment charges		18,160			32,475			(14,315	)		(44	)
Dividends declared on preferred stock		(23,888	)		—			(23,888	)		N/A
Adjustments for unconsolidated affiliates and noncontrolling interest		(1,815	)		41,000			(42,815	)		(104	)

NAREIT FFO	$	1,674,370		$	1,256,975		$	417,395			33	%
Straight-line revenue		(123,716	)		(147,664	)		(23,948	)		(16	)
Straight-line expense		38,378			29,732			8,646			29
Stock-based compensation expense		80,153			68,138			12,015			18
Non-cash portion of tax provision		(6,707	)		7,865			(14,572	)		(185	)
Non-real estate related depreciation, amortization and accretion		125,088			98,853			26,235			27
Amortization of deferred financing costs, capitalized interest, debt discounts and premiums and long-term deferred interest charges		8,622			22,955			(14,333	)		(62	)
Other expense(1)		62,060			207,500			(145,440	)		(70	)
Loss on retirement of long-term obligations		3,473			38,701			(35,228	)		(91	)
Other operating expenses(2)		50,357			39,064			11,293			29
Capital improvement capital expenditures		(75,041	)		(81,218	)		(6,177	)		(8	)
Corporate capital expenditures		(24,146	)		(30,383	)		(6,237	)		(21	)
Adjustments for unconsolidated affiliates and noncontrolling interest		1,815			(41,000	)		(42,815	)		(104	)

AFFO	$	1,814,706		$	1,469,518		$	345,188			23	%

(1)	Primarily includes unrealized losses on foreign currency exchange rate fluctuations.

(2)	Primarily includes acquisition-related costs, integration costs, losses from sale of assets and impairment charges.

AFFO growth was primarily attributable to the increase in our operating profit and a decrease in capital improvement and corporate capital expenditures, partially offset by increases in cash paid for interest and taxes and dividends declared on preferred stock.

Results of Operations

Years Ended December 31, 2013 and 2012

(in thousands, except percentages)

Revenue


	Year Ended December 31,				Amount of Increase (Decrease)		Percent Increase (Decrease)
	2013		2012		Amount of Increase (Decrease)		Percent Increase (Decrease)
Rental and management
Domestic	$	2,189,365	$	1,940,689	$	248,676		13	%
International		1,097,725		862,801		234,924		27

Total rental and management		3,287,090		2,803,490		483,600		17
Network development services		74,317		72,470		1,847		3

Total revenues	$	3,361,407	$	2,875,960	$	485,447		17	%

Total revenues for the year ended December 31, 2013 increased 17% to $3,361.4 million. The increase was primarily attributable to an increase in both of our rental and management segments, including organic revenue growth attributable to our legacy sites and revenue growth attributable to the approximately 21,880 new sites that we have constructed or acquired since January 1, 2012. Approximately $84.1 million of the increase was attributable to revenues generated by MIPT.

Domestic rental and management segment revenue for the year ended December 31, 2013 increased 13% to $2,189.4 million. This growth was comprised of:

•

Revenue growth from legacy sites of approximately 7%, which includes approximately 6% due to incremental revenue primarily generated from new tenant leases and amendments to existing tenant leases on our legacy sites and approximately 2% attributable to contractual rent escalations, net of tenant lease cancellations, partially offset by approximately 1% due to a tenant billing settlement and a lease termination settlement during the year ended December 31, 2012, which totaled $15.6 million;

•

Revenue growth of approximately 4% attributable to the addition of approximately 4,860 domestic sites, as well as managed rooftop and tower sites and land interests under third-party sites in connection with our acquisition of MIPT;

•

Revenue growth from new sites (excluding MIPT) of approximately 3%, resulting from the construction or acquisition of approximately 1,360 new sites, as well as land interests under third-party sites since January 1, 2012; and

•

A decrease of approximately 1% from the impact of straight-line lease accounting.

International rental and management segment revenue for the year ended December 31, 2013 increased 27% to $1,097.7 million. This growth was comprised of:

•

Revenue growth from new sites (excluding MIPT) of approximately 22%, resulting from the construction or acquisition of approximately 15,150 new sites since January 1, 2012;

•

Revenue growth from legacy sites of approximately 12%, which includes approximately 11% due to incremental revenue primarily generated from new tenant leases and amendments to existing tenant leases on our legacy sites and approximately 2% attributable to contractual rent escalations, net of tenant lease cancellations, partially offset by less than 1% for the reversal of revenue reserves during the year ended December 31, 2012;

•

Revenue growth of less than 1% attributable to the addition of approximately 510 sites in Costa Rica and Panama in connection with our acquisition of MIPT; and

•

A decrease of approximately 7% attributable to the negative impact from foreign currency translation, which includes, among others, the negative impact of approximately 3% related to fluctuations in BRL, approximately 2% related to fluctuations in South African Rand (“ZAR”) and approximately 2% related to fluctuations in the Indian Rupee (“INR”).

Network development services segment revenue for the year ended December 31, 2013 increased 3% to $74.3 million. The growth was primarily attributable to an increase in structural engineering services and site acquisition, zoning and permitting services as a result of an increase in tenant lease applications, which are primarily associated with certain tenants’ next generation technology network upgrade projects during the year ended December 31, 2013.

Gross Margin


	Year Ended December 31,				Amount of Increase (Decrease)		Percent Increase (Decrease)
	2013		2012		Amount of Increase (Decrease)		Percent Increase (Decrease)
Rental and management
Domestic	$	1,783,946	$	1,583,134	$	200,812		13	%
International		697,614		548,726		148,888		27

Total rental and management		2,481,560		2,131,860		349,700		16
Network development services		43,753		37,640		6,113		16	%

Domestic rental and management segment gross margin for the year ended December 31, 2013 increased 13% to $1,783.9 million, which was comprised of:

•

Gross margin growth from legacy sites of approximately 7%, primarily associated with the increase in revenue, as described above;

•

Gross margin growth of approximately 4% attributable to the addition of approximately 4,860 domestic sites, as well as managed rooftop and tower sites and land interests under third-party sites, in connection with our acquisition of MIPT; and

•

Gross margin growth from new sites (excluding MIPT) of approximately 2%, resulting from the construction or acquisition of approximately 1,360 new sites, as well as land interests under third-party sites since January 1, 2012.

International rental and management segment gross margin for the year ended December 31, 2013 increased 27% to $697.6 million, which was comprised of:

•

Gross margin growth from new sites (excluding MIPT) of approximately 22%, resulting from the construction or acquisition of approximately 15,150 new sites since January 1, 2012;

•

Gross margin growth from legacy sites of approximately 11%, primarily associated with the increase in revenue, as described above, and the impact of the early termination of a portion of the notes receivable with TV Azteca, which had a positive impact of less than 2%;

•

Gross margin growth of less than 1% attributable to the addition of approximately 510 sites in Costa Rica and Panama in connection with our acquisition of MIPT; and

•

A decrease of over 6% attributable to the negative impact from foreign currency translation, which includes, among others, the negative impact of approximately 3% related to fluctuations in BRL, approximately 2% related to fluctuations in ZAR and approximately 1% related to fluctuations in INR.

Network development services segment gross margin for the year ended December 31, 2013 increased 16% to $43.8 million. The increase was primarily attributable to a change in the mix of services rendered, which generated higher margins.

Selling, General, Administrative and Development Expense


	Year Ended December 31,				Amount of Increase (Decrease)		Percent Increase (Decrease)
	2013		2012		Amount of Increase (Decrease)		Percent Increase (Decrease)
Rental and management
Domestic	$	103,989	$	85,663	$	18,326		21	%
International		123,338		95,579		27,759		29

Total rental and management		227,327		181,242		46,085		25
Network development services		9,257		6,744		2,513		37
Other		178,961		139,315		39,646		28

Total selling, general, administrative and development expense	$	415,545	$	327,301	$	88,244		27	%

Total SG&A for the year ended December 31, 2013 increased 27% to $415.5 million. The increase was primarily attributable to an increase in our international rental and management segment and other SG&A.

Domestic rental and management segment SG&A for the year ended December 31, 2013 increased 21% to $104.0 million. The increase was primarily driven by increasing personnel costs and professional fees to support our business.

International rental and management segment SG&A for the year ended December 31, 2013 increased 29% to $123.3 million. The increase was primarily due to increases in personnel costs and professional fees to support the growth in our international markets, including Uganda and Germany, which commenced operations in 2012.

Network development services segment SG&A for the year ended December 31, 2013 increased 37% to $9.3 million. The increase was primarily attributable to a reversal of $1.4 million of bad debt expense during the year ended December 31, 2012 upon the receipt of tenant payments for amounts previously reserved, as well as incremental costs to support our business.

Other SG&A for the year ended December 31, 2013 increased 28% to $179.0 million. The increase was primarily due to a $16.4 million increase in SG&A related stock-based compensation expense, which included an incremental $7.8 million due to the timing of recognition of expense associated with awards granted to retirement eligible employees. In addition, other SG&A increased $23.2 million, which included, among other things, an increase of $26.9 million in corporate expenses, partially offset by a $3.7 million non-recurring state tax item recorded during the year ended December 31, 2012. The increase in corporate expenses included approximately $14.8 million of legal expenses.

Operating Profit


	Year Ended December 31,				Amount of Increase (Decrease)		Percent Increase (Decrease)
	2013		2012		Amount of Increase (Decrease)		Percent Increase (Decrease)
Rental and management
Domestic	$	1,679,957	$	1,497,471	$	182,486		12	%
International		574,276		453,147		121,129		27

Total rental and management		2,254,233		1,950,618		303,615		16
Network development services		34,496		30,896		3,600		12	%

Domestic rental and management segment operating profit for the year ended December 31, 2013 increased 12% to $1,680.0 million. The growth was primarily attributable to the increase in our domestic rental and management segment gross margin (13%), as described above, and was partially offset by increases in our domestic rental and management segment SG&A (21%), as described above.

International rental and management segment operating profit for the year ended December 31, 2013 increased 27% to $574.3 million. The growth was primarily attributable to the increase in our international rental and management segment gross margin (27%), as described above, and was partially offset by increases in our international rental and management segment SG&A (29%), as described above.

Network development services segment operating profit for the year ended December 31, 2013 increased 12% to $34.5 million. The growth was primarily attributable to the increase in network development services segment gross margin (16%), as described above, and was partially offset by an increase in our network development services segment SG&A (37%), as described above.

Depreciation, Amortization and Accretion


	Year Ended December 31,				Amount of Increase (Decrease)		Percent Increase (Decrease)
	2013		2012		Amount of Increase (Decrease)		Percent Increase (Decrease)
Depreciation, amortization and accretion	$	800,145	$	644,276	$	155,869		24	%

Depreciation, amortization and accretion for the year ended December 31, 2013 increased 24% to $800.1 million. The increase was primarily attributable to the depreciation, amortization and accretion associated with the acquisition or construction of approximately 21,880 sites since January 1, 2012, which resulted in an increase in property and equipment and intangible assets subject to amortization.

Other Operating Expenses


	Year Ended December 31,				Amount of Increase (Decrease)		Percent Increase (Decrease)
	2013		2012		Amount of Increase (Decrease)		Percent Increase (Decrease)
Other operating expenses	$	71,539	$	62,185	$	9,354		15	%

Other operating expenses for the year ended December 31, 2013 increased 15% to $71.5 million primarily due to an increase of approximately $11.9 million in acquisition related costs. This increase was partially offset by a decrease of approximately $1.9 million in losses from the sale or disposal of assets and impairment charges.

Interest Income, TV Azteca, net


	Year Ended December 31,				Amount of Increase (Decrease)		Percent Increase (Decrease)
	2013		2012		Amount of Increase (Decrease)		Percent Increase (Decrease)
Interest income, TV Azteca, net	$	22,235	$	14,258	$	7,977		56	%

Interest income, TV Azteca, net for the year ended December 31, 2013 increased 56% to $22.2 million. During the year ended December 31, 2013, we received a payment from TV Azteca, which included $28.0 million of principal on the notes receivable from TV Azteca, related interest and a prepayment penalty of $4.9 million. In addition, we recorded additional interest income of $2.7 million related to the write-off of a portion of the unamortized discount associated with the original notes receivable.

Interest Expense


	Year Ended December 31,				Amount of Increase (Decrease)		Percent Increase (Decrease)
	2013		2012		Amount of Increase (Decrease)		Percent Increase (Decrease)
Interest expense	$	458,296	$	401,665	$	56,631		14	%

Interest expense for the year ended December 31, 2013 increased 14% to $458.3 million. The increase was primarily attributable to an increase in our average debt outstanding of approximately $2.9 billion, which was primarily used to fund our acquisitions, partially offset by a decrease in our annualized weighted average cost of borrowing from 5.37% to 4.40%. The weighted average contractual interest rate was 3.84% at December 31, 2013.

Loss on Retirement of Long-Term Obligations


	Year Ended December 31,				Amount of Increase (Decrease)		Percent Increase (Decrease)
	2013		2012		Amount of Increase (Decrease)		Percent Increase (Decrease)
Loss on retirement of long-term obligations	$	38,701	$	398	$	38,303		9,624	%

During the year ended December 31, 2013, loss on retirement of long-term obligations increased to $38.7 million. We recorded a loss of $35.3 million due to the repayment of the $1.75 billion outstanding balance of the Certificates and incurred prepayment consideration and recorded the acceleration of deferred financing costs. In addition, we recorded a loss of $3.4 million related to the acceleration of the remaining deferred financing costs associated with the 2011 Credit Facility, which was terminated in June 2013, and the 2012 Term Loan, which was terminated in October 2013.

Other Expense


	Year Ended December 31,				Amount of Increase (Decrease)		Percent Increase (Decrease)
	2013		2012		Amount of Increase (Decrease)		Percent Increase (Decrease)
Other expense	$	207,500	$	38,300	$	169,200		442	%

During the year ended December 31, 2013, other expense increased to $207.5 million. The increase was primarily a result of an increase in unrealized foreign currency losses of $177.4 million. During the years ended December 31, 2013 and 2012, we recorded unrealized foreign currency losses of approximately $211.7 million and $34.3 million, respectively, resulting primarily from fluctuations in the foreign currency exchange rates associated with our intercompany notes and similar unaffiliated balances denominated in a currency other than the subsidiaries’ functional currencies. The increase in unrealized foreign currency losses is primarily due to the negative impact associated with fluctuations in GHS and BRL.

Income Tax Provision


	Year Ended December 31,						Amount of Increase (Decrease)			Percent Increase (Decrease)
	2013			2012			Amount of Increase (Decrease)			Percent Increase (Decrease)
Income tax provision	$	59,541		$	107,304		$	(47,763	)		(45	)%
Effective tax rate		11.0	%		15.3	%

The income tax provision for the year ended December 31, 2013 decreased 45% to $59.5 million. The ETR for the year ended December 31, 2013 decreased to 11.0% from 15.3%. The ETR during the year ended December 31, 2012 included an increase of 8% due to a valuation allowance recorded on certain previously unreserved deferred tax assets. The ETR during the year ended December 31, 2013 included an increase of 4% due to the restructuring of our domestic TRSs.

The ETR on income from continuing operations for the years ended December 31, 2013 and 2012 differs from the federal statutory rate primarily due to our qualification for taxation as a REIT effective as of January 1, 2012 and adjustments for foreign items.

Net Income/Adjusted EBITDA


	Year Ended December 31,						Amount of Increase (Decrease)			Percent Increase (Decrease)
	2013			2012			Amount of Increase (Decrease)			Percent Increase (Decrease)
Net income	$	482,208		$	594,025		$	(111,817	)		(19	)%
Income on equity method investments		—			(35	)		(35	)		(100	)
Income tax provision		59,541			107,304			(47,763	)		(45	)
Other expense		207,500			38,300			169,200			442
Loss on retirement of long-term obligations		38,701			398			38,303			9,624
Interest expense		458,296			401,665			56,631			14
Interest income		(9,706	)		(7,680	)		2,026			26
Other operating expenses		71,539			62,185			9,354			15
Depreciation, amortization and accretion		800,145			644,276			155,869			24
Stock-based compensation expense		68,138			51,983			16,155			31

Adjusted EBITDA	$	2,176,362		$	1,892,421		$	283,941			15	%

Net income for the year ended December 31, 2013 decreased 19% to $482.2 million. The increase in our operating profit of $307.2 million, as described above, was partially offset by increases in corporate SG&A, depreciation, amortization and accretion expense, interest expense and a loss on retirement of long-term obligations recorded during the year ended December 31, 2013. In addition, the increase in our operating profit was partially offset by an increase in other expenses, primarily due to unrealized foreign currency losses. Net income was positively impacted by a decrease in our income tax provision.

Adjusted EBITDA for the year ended December 31, 2013 increased 15% to $2,176.4 million. Adjusted EBITDA growth was primarily attributable to the increase in our gross margin of $355.8 million, and was partially offset by an increase in SG&A of $71.9 million, excluding the impact of stock-based compensation expense.

Net Income/NAREIT FFO/AFFO


	Year Ended December 31,						Amount of Increase (Decrease)			Percent Increase (Decrease)
	2013			2012			Amount of Increase (Decrease)			Percent Increase (Decrease)
Net income	$	482,208		$	594,025		$	(111,817	)		(19	)%
Real estate related depreciation, amortization and accretion		701,292			562,298			138,994			25
Losses from sale or disposal of real estate and real estate related impairment charges		32,475			23,650			8,825			37
Adjustments for unconsolidated affiliates and noncontrolling interest		41,000			20,238			20,762			103

NAREIT FFO	$	1,256,975		$	1,200,211		$	56,764			5	%
Straight-line revenue		(147,664	)		(165,806	)		(18,142	)		(11	)
Straight-line expense		29,732			33,700			(3,968	)		(12	)
Stock-based compensation expense		68,138			51,983			16,155			31
Non-cash portion of tax provision		7,865			38,027			(30,162	)		(79	)
Non-real estate related depreciation, amortization and accretion		98,853			81,978			16,875			21
Amortization of deferred financing costs, capitalized interest, debt discounts and premiums and long-term deferred interest charges		22,955			21,008			1,947			9
Other expense(1)		207,500			38,300			169,200			442
Loss on retirement of long-term obligations		38,701			398			38,303			9,624
Other operating expenses(2)		39,064			38,535			529			1
Capital improvement capital expenditures		(81,218	)		(75,444	)		5,774			8
Corporate capital expenditures		(30,383	)		(20,047	)		10,336			52
Adjustments for unconsolidated affiliates and noncontrolling interest		(41,000	)		(20,238	)		20,762			103

AFFO	$	1,469,518		$	1,222,605		$	246,913			20	%

(1)	Primarily includes unrealized loss on foreign currency exchange rate fluctuations.

(2)	Primarily includes transaction related costs.

NAREIT FFO for the year ended December 31, 2013 was $1,257.0 million as compared to NAREIT FFO of $1,200.2 million for the year ended December 31, 2012. AFFO for the year ended December 31, 2013 increased 20% to $1,469.5 million as compared to $1,222.6 million for the year ended December 31, 2012. AFFO growth was primarily attributable to the increase in our operating profit and a decrease in cash paid for income taxes, partially offset by an increase in corporate SG&A, cash paid for interest and capital improvement and corporate capital expenditures.

Liquidity and Capital Resources

Overview

During the year ended December 31, 2014, we raised capital, thereby increasing our financial flexibility and our ability to grow our business while reducing our leverage, consistent with our long-term financial policies. Our significant 2014 financing transactions included:

•

The completion of registered public offerings (i) through a reopening of the 3.40% Notes and a reopening of the 5.00% Notes, in aggregate principal amounts of $250.0 million and $500.0 million, respectively and (ii) of the 3.450% Notes in an aggregate principal amount of $650.0 million. We used the net proceeds from each offering to repay certain indebtedness under our existing credit facilities.

•

The completion of a registered public offering of 6,000,000 shares of Mandatory Convertible Preferred Stock. We used the net proceeds of $582.9 million to fund acquisitions initially funded by indebtedness incurred under the 2013 Credit Facility.

•

The amendment and restatement of our 2012 Credit Facility, which, among other things, increased the commitments thereunder to $1.5 billion and extended the maturity date to January 31, 2020.

As of December 31, 2014, we had approximately $2.7 billion of total liquidity, comprised of approximately $313.5 million in cash and cash equivalents and the ability to borrow up to $2.4 billion, net of outstanding letters of credit, under the 2013 Credit Facility and the 2014 Credit Facility.

Summary cash flow information for the years ended December 31, 2014, 2013 and 2012 is set forth below (in thousands):


	2014			2013			2012
Net cash provided by (used for):
Operating activities	$	2,134,589		$	1,599,047		$	1,414,391
Investing activities		(1,949,548	)		(5,173,337	)		(2,558,385	)
Financing activities		(134,591	)		3,525,565			1,170,366
Net effect of changes in exchange rates on cash and cash equivalents		(30,534	)		(26,317	)		12,055

Net increase (decrease) in cash and cash equivalents	$	19,916		$	(75,042	)	$	38,427

We use our cash flows to fund our operations and investments in our business, including tower maintenance and improvements, communications site construction and managed network installations, and tower and land acquisitions. Additionally, we use our cash flows to make distributions, including distributions of our REIT taxable income to maintain our qualification for taxation as a REIT under the Code. We may also repurchase our existing indebtedness from time to time. We typically fund our international expansion efforts primarily through a combination of cash on hand, intercompany debt and equity contributions.

As of December 31, 2014, we had total outstanding indebtedness of approximately $14.6 billion, with a current portion of $897.6 million. During the year ended December 31, 2014, we generated sufficient cash flow from operations to fund our capital expenditures and debt service obligations, as well as our required REIT

distributions. We believe the cash generated by operating activities during the year ending December 31, 2015, together with our increased borrowing capacity under our credit facilities and bridge loan commitment, will be sufficient to fund our required distributions, capital expenditures, debt service obligations (interest and principal repayments) and signed acquisitions. As of December 31, 2014, we had approximately $185.8 million of cash and cash equivalents held by our foreign subsidiaries, of which $67.1 million was held by our joint ventures. Historically, it has not been our practice to repatriate cash from our foreign subsidiaries primarily due to our ongoing expansion efforts and related capital needs. However, in the event that we do repatriate any funds, we may be required to accrue and pay taxes.

Cash Flows from Operating Activities

For the year ended December 31, 2014, cash provided by operating activities increased $535.5 million as compared to the year ended December 31, 2013. This increase was primarily due to an increase in the operating profit of our rental and management segments, cash provided by working capital and a decrease in restricted cash, partially offset by increases in cash paid for interest and taxes. Working capital was positively impacted by the receipt of capital contributions from tenants and a value added tax refund, partially offset by an increase in accounts receivable.

For the year ended December 31, 2013, cash provided by operating activities increased $184.7 million as compared to the year ended December 31, 2012. This increase was primarily due to an increase in the operating profit of our rental and management segments as compared to the year ended December 31, 2012, partially offset by increases in Other SG&A and cash paid for interest and a decrease in cash provided by working capital. Working capital was positively impacted by the receipt of capital contributions from tenants and partially offset by an increase in prepaid assets.

Cash Flows from Investing Activities

For the year ended December 31, 2014, cash used for investing activities decreased approximately $3,223.8 million, as compared to the year ended December 31, 2013. Our significant investing activities in 2014 included the following:

•

We spent $974.4 million for purchases of property and equipment and construction activities, including (i) $521.6 million of capital expenditures for discretionary capital projects, such as completion of the construction of approximately 3,133 communications sites and the installation of approximately 530 shared generators domestically, (ii) $133.7 million spent to acquire land under our towers that was subject to ground agreements (including leases), (iii) $99.2 million of capital expenditures related to capital improvements primarily attributable to our communications sites and corporate capital expenditures primarily attributable to information technology improvements, (iv) $194.4 million for the redevelopment of existing communications sites to accommodate new tenant equipment and (v) $25.5 million of capital expenditures related to start-up capital projects primarily attributable to acquisitions and new market launches and costs that are contemplated in the business cases for these investments.

•

We completed the acquisition of 100% of the equity interests of BR Towers for an estimated preliminary purchase price of approximately $568.9 million, net of debt assumed and outstanding preferred stock.

•

We spent $441.7 million for the acquisition of an aggregate of approximately 400 communications sites in Brazil, Ghana, Mexico, Uganda and the United States, as well as to satisfy obligations related to sites acquired during the year ended December 31, 2013 in Brazil, South Africa and the United States.

For the year ended December 31, 2013, cash used for investing activities increased approximately $2,615.0 million, as compared to the year ended December 31, 2012. Our significant investing transactions in 2013 included the following:

•

We spent $724.5 million for purchases of property and equipment and construction activities, including (i) $381.6 million of capital expenditures for discretionary capital projects, such as completion of the construction of approximately 2,370 communications sites and the installation of approximately 1,310 shared generators domestically, (ii) $83.8 million spent to acquire land under our towers that was subject to ground agreements (including leases), (iii) $111.6 million of capital expenditures related to capital improvements primarily attributable to our communications sites and corporate capital expenditures primarily attributable to information technology improvements, (iv) $120.8 million for the redevelopment of existing communications sites to accommodate new tenant equipment and (v) $26.7 million of capital expenditures related to start-up capital projects primarily attributable to acquisitions and new market launches and costs that are contemplated in the business cases for these investments.

•

We completed the acquisition of MIPT for a purchase price of approximately $4.9 billion, funded by cash payments of $3.3 billion and the assumption of approximately $1.5 billion of existing MIPT debt. In addition, we spent $1.2 billion to acquire approximately 5,330 communications sites in our legacy markets, primarily in Mexico and Brazil.

We plan to continue to allocate our available capital, after satisfying our distribution requirements, among investment alternatives that meet our return on investment criteria. Accordingly, we expect to continue to deploy our capital through our annual capital expenditure program, including land purchases and new site construction, and through acquisitions. We expect that our 2015 total capital expenditures will be between approximately $800 million and $900 million, including: (i) between $105 million and $115 million for capital improvements and corporate capital expenditures, (ii) between $30 million and $40 million for start-up capital projects, (iii) between $155 million and $175 million for the redevelopment of existing communications sites, (iv) between $170 million and $190 million for ground lease purchases and (v) between $340 million and $380 million for other discretionary capital projects including the construction of approximately 2,750 to 3,250 new communications sites.

Cash Flows from Financing Activities

Our significant financing transactions were as follows (in millions):


	Year ended December 31, 2014
	2014			2013
Proceeds from term loan	$	—		$	1,500.0
Proceeds from issuance of senior notes, net		1,415.8			2,221.8
Proceeds from the issuance of preferred stock, net		583.1			—
Proceeds from issuance of Securities		—			1,778.5
Repayment of Certificates		—			(1,750.0	)
Repayment of term loan		—			(750.0	)
Purchases of common stock		—			(145.0	)
Distributions paid on common stock		(404.6	)		(434.7	)

In addition to the transactions noted above, our financing activities included borrowings and repayments under our credit facilities and other long-term borrowings.

Mandatory Convertible Preferred Stock Offering. On May 12, 2014, we completed a registered public offering of 6,000,000 shares of our Mandatory Convertible Preferred Stock. The net proceeds of the offering

were $582.9 million after deducting commissions and estimated expenses. We used the net proceeds from this offering to fund acquisitions, including the acquisition from Richland, initially funded by indebtedness incurred under the 2013 Credit Facility.

Unless converted earlier, each share of the Mandatory Convertible Preferred Stock will automatically convert on May 15, 2017, into between 0.9174 and 1.1468 shares of common stock, depending on the applicable market value of the common stock and subject to anti-dilution adjustments.

Dividends on shares of Mandatory Convertible Preferred Stock are payable on a cumulative basis when, as and if declared by our Board of Directors (or an authorized committee thereof) at an annual rate of 5.25% on the liquidation preference of $100.00 per share, on February 15, May 15, August 15 and November 15 of each year, commencing on August 15, 2014 to, and including, May 15, 2017. We may pay dividends in cash or, subject to certain limitations, in shares of common stock or any combination of cash and shares of common stock. The terms of the Mandatory Convertible Preferred Stock provide that, unless full cumulative dividends have been paid or set aside for payment on all outstanding Mandatory Convertible Preferred Stock for all prior dividend periods, no dividends may be declared or paid on common stock.

GTP Notes. In connection with our acquisition of MIPT, we assumed approximately $1.49 billion principal amount of existing indebtedness issued by certain subsidiaries of GTP in several securitization transactions. GTP Acquisition Partners I, LLC (“GTP Partners”) issued the Series 2011-1 notes, Series 2011-2 notes and Series 2013-1 notes, and GTP Cellular Sites, LLC (“GTP Cellular Sites,” and together with GTP Partners, the “GTP Issuers”) issued the Series 2012-1 notes and Series 2012-2 notes.

In August 2014, we repaid in full the aggregate principal amount outstanding of $250.0 million under the Series 2010-1 Class C Notes and the Series 2010-1 Class F Notes issued by GTP Towers Issuer, LLC (together, the “Series 2010-1 Notes”).

The following table sets forth certain terms of the GTP Notes:


GTP Notes	Issue Date		Original Principal Amount (in thousands)		Interest Rate			Anticipated Repayment Date		Final Maturity Date
Series 2011-1 Class C notes		March 11, 2011	$	70,000		3.967	%		June 15, 2016		June 15, 2041
Series 2011-2 Class C notes		July 7, 2011	$	490,000		4.347	%		June 15, 2016		June 15, 2041
Series 2011-2 Class F notes		July 7, 2011	$	155,000		7.628	%		June 15, 2016		June 15, 2041
Series 2012-1 Class A notes(1)		February 28, 2012	$	100,000		3.721	%		March 15, 2017		March 15, 2042
Series 2012-2 Class A notes(1)		February 28, 2012	$	114,000		4.336	%		March 15, 2019		March 15, 2042
Series 2012-2 Class B notes		February 28, 2012	$	41,000		6.413	%		March 15, 2019		March 15, 2042
Series 2012-2 Class C notes		February 28, 2012	$	27,000		7.358	%		March 15, 2019		March 15, 2042
Series 2013-1 Class C notes		April 24, 2013	$	190,000		2.364	%		May 15, 2018		May 15, 2043
Series 2013-1 Class F notes		April 24, 2013	$	55,000		4.704	%		May 15, 2018		May 15, 2043

(1)	Does not reflect MIPT’s repayment of approximately $1.4 million aggregate principal amount prior to the date of acquisition and our repayment of approximately $3.5 million aggregate principal amount after the date of acquisition in accordance with the repayment schedules.

BR Towers Debt. In connection with the acquisition of BR Towers, we assumed approximately 671.5 million BRL (approximately $261.1 million based on exchange rates at the date of closing) aggregate principal amount of existing indebtedness consisting of (i) 323.4 million of BRL denominated privately issued simple debentures (“BR Towers Private Debentures”) (with an original principal amount of 330.0 million BRL), (ii) 313.1 million BRL of denominated publicly issued simple debentures (“BR Towers Debentures”) (with an original principal amount of 300.0 million BRL) issued by a subsidiary of BR Towers (the “BRT Issuer”), and (iii) a BRL denominated credit facility with Banco Nacional de Desenvolvimento Economico e Social, which

allows a subsidiary of BR Towers (the “BRT Borrower”) to borrow up to 48.1 million BRL through an intermediary bank (the “BR Towers Credit Facility”).

On December 11, 2014, we repaid all amounts outstanding under the BR Towers Private Debentures, which included a prepayment penalty of 3.2 million BRL (approximately $1.2 million on the date of repayment).

The BR Towers Debentures were issued on October 15, 2013, and have a maturity date of October 15, 2023. The BR Towers Debentures bear interest at a rate of 7.40%. The aggregate principal amount of the BR Towers Debentures may be adjusted periodically relative to changes in the National Extended Consumer Price Index. Any such increase in the principal amount will be capitalized in a manner consistent with the agreement governing the BR Towers Debentures (the “Debenture Agreement”). Payments of principal and interest are made quarterly, beginning on January 15, 2014, in accordance with the amortization schedule set forth in the Debenture Agreement.

We may redeem the BR Towers Debentures beginning on October 15, 2018 at the then outstanding principal amount plus a surcharge, calculated in accordance with the Debenture Agreement, and all accrued and unpaid interest thereon. As of December 31, 2014, we had 315.3 million BRL (approximately $118.7 million) aggregate principal amount outstanding under the BR Towers Debentures.

The BR Towers Debentures are secured by (i) 100% of the shares of the BRT Issuer and (ii) all proceeds and rights from the issuance of the BR Towers Debentures, including amounts in a Resource Account (as defined in the applicable agreement). The Debenture Agreement includes contractual covenants and other restrictions customary for public debentures. Among other things, the Debenture Agreement requires that (i) the BRT Issuer maintain a debt service coverage ratio of at least 1.10, (ii) the risk rating of the BR Towers Debentures not be downgraded by two or more notches, (iii) the BRT Issuer meet certain conditions to distribute dividends or interest on the issuer’s own capital, (iv) the issuer not incur additional indebtedness in an aggregate amount greater than 5.0 million BRL (which amount is subject to adjustment as set forth in the agreement) and (v) the issuer maintain a leverage index (as defined in the Debenture Agreement) of at least 30%.

The BR Towers Credit Facility consists of three sublimits of 20.2 million BRL, 27.6 million BRL and 0.2 million BRL, respectively. The sublimits mature between July 15, 2020 and January 15, 2022 and had interest rates between 3.50% and 10.80% as of December 31, 2014.

As of December 31, 2014, 43.5 million BRL (approximately $16.4 million) was outstanding under the BR Towers Credit Facility and the BRT Borrower maintains the ability to draw down the remaining 4.6 million BRL (approximately $1.7 million) until June 26, 2015. The BR Towers Credit Facility is secured by the conditional assignment of receivables.

Mexican Loan. In connection with the acquisition of towers in Mexico from NII Holdings, Inc. (“NII”) during the fourth quarter of 2013, one of our Mexican subsidiaries entered into a 5.2 billion MXN denominated unsecured bridge loan (the “Mexican Loan”) and subsequently borrowed approximately 4.9 billion MXN (approximately $374.7 million at the date of borrowing). Our Mexican subsidiary’s ability to further draw under the Mexican Loan expired in February 2014. The Mexican Loan bears interest at a margin over the Equilibrium Interbank Interest Rate (“TIIE”). During the year ended December 31, 2014, our Mexican subsidiary repaid 1.1 billion MXN (approximately $80.4 million on the date of repayment) of the outstanding indebtedness using cash on hand. As of December 31, 2014, the current margin over TIIE was 1.50%.

Ghana Loan and 2014 Ghana Loan. During the year ended December 31, 2014, our joint venture in Ghana with MTN Group Limited converted $175.2 million of existing notes under the U.S. Dollar-denominated shareholder loan (the “Ghana Loan”) into a new 220.9 million GHS (approximately $68.7 million) denominated shareholder loan (the “2014 Ghana Loan”), as the borrower, with one of our wholly owned subsidiaries (the “ATC Ghana Subsidiary”) and a wholly owned subsidiary of MTN Ghana (the “MTN Ghana Subsidiary”), as the

lenders. The 2014 Ghana Loan accrues interest at 21.87% per annum and matures on December 31, 2019. The portion of the loans made by the ATC Ghana Subsidiary is eliminated in consolidation and the portion of the loans made by the MTN Ghana Subsidiary is reported as outstanding debt.

Colombian Credit Facility. On October 14, 2014, one of our Colombian subsidiaries (“ATC Sitios”) entered into a loan agreement for a new 200.0 billion COP (approximately $96.8 million at the date of borrowing) denominated long-term credit facility (the “Colombian Credit Facility”). On October 24, 2014, ATC Sitios used borrowings under the Colombian Credit Facility, together with cash on hand, to repay the Colombian Long-Term Credit Facility, as well as to repay six COP denominated bridge loans, which one of our Colombian subsidiaries had entered into in connection with the acquisition of communications sites in Colombia.

Any outstanding principal and accrued but unpaid interest will be due and payable in full at maturity. The Colombian Credit Facility may be prepaid in whole or in part, subject to certain limitations and prepayment consideration, at any time.

Principal and interest are payable quarterly in arrears with principal due in accordance with the repayment schedule included in the loan agreement. Interest accrues at a per annum rate equal to 4.00% above the three-month Inter-bank Rate (“IBR”) in effect at the beginning of each Interest Period (as defined in the loan agreement). The loan agreement also requires that ATC Sitios manage exposure to variability in interest rates on certain of the amounts outstanding under the Colombian Credit Facility. As of December 31, 2014, the interest rate, after giving effect to the interest rate swap agreements, is 9.05%.

The Colombian Credit Facility is secured by, among other things, liens on towers owned by ATC Sitios. The loan agreement contains certain reporting, information, financial ratios and operating covenants. Failure to comply with certain of the financial and operating covenants would constitute a default, which could result in, among other things, the amounts outstanding, including all accrued interest and unpaid fees, becoming immediately due and payable.

Colombian Loan. In connection with the establishment of our joint venture with Millicom International Cellular SA (“Millicom”) and the acquisition of certain communications sites in Colombia, ATC Colombia B.V., our majority owned subsidiary, entered into a U.S. Dollar-denominated shareholder loan agreement (the “Colombian Loan”), as the borrower, with our wholly owned subsidiary (the “ATC Colombian Subsidiary”), and a wholly owned subsidiary of Millicom (the “Millicom Subsidiary”), as the lenders. During the year ended December 31, 2014, the joint venture borrowed an additional $3.0 million under the Colombian Loan, which was subsequently converted from debt to equity. In July 2014, we purchased Millicom’s interest in the joint venture and the Colombian Loan using proceeds from borrowings under the 2013 Credit Facility.

Costa Rica Loan. In connection with our acquisition of MIPT, we assumed $32.6 million of secured debt in Costa Rica (the “Costa Rica Loan”), which we repaid in full in February 2014.

Richland Notes. In connection with our acquisition of entities holding a portfolio of communications sites from Richland, we assumed approximately $196.5 million of secured debt (the “Richland Notes”), which we repaid in full in June 2014.

Short-Term Credit Facility. In September 2013, we entered into a $1.0 billion senior unsecured revolving credit facility (the “Short-Term Credit Facility”), which matured on September 19, 2014. The Short-Term Credit Facility was undrawn at the time of maturity.

2013 Credit Facility. In June 2013, we entered into the 2013 Credit Facility. The 2013 Credit Facility has a term of five years and includes two optional one-year renewal periods. The current margin over the London Interbank Offered Rate (“LIBOR”) that we incur on borrowings (should we choose LIBOR Advances) is 1.250% and the current commitment fee on the undrawn portion is 0.150%.

On September 19, 2014, we entered into an amendment agreement with respect to the 2013 Credit Facility, which (i) amended the limitation on indebtedness of, and guaranteed by, our subsidiaries to the greater of (x) $800.0 million and (y) 50% of Adjusted EBITDA (as defined in the 2013 Credit Facility) on a consolidated basis as of the last day of the most recently completed fiscal quarter and (ii) permitted indebtedness owed by certain of our subsidiaries to our joint venture partners.

During the year ended December 31, 2014, we borrowed $912.0 million and repaid an aggregate of $2.8 billion of revolving indebtedness under the 2013 Credit Facility. As of December 31, 2014, we had no amounts outstanding and approximately $3.2 million of undrawn letters of credit under the 2013 Credit Facility. In February 2015, we borrowed a net amount of $115.0 million under the 2013 Credit Facility. We maintain the ability to draw down and repay amounts under the 2013 Credit Facility in the ordinary course.

2013 Term Loan. In October 2013, we entered into a $1.5 billion unsecured term loan (the “2013 Term Loan”). The 2013 Term Loan includes an expansion option allowing us to request additional commitments of up to $500.0 million.

On September 19, 2014, we entered into an amendment agreement with respect to the 2013 Term Loan, which (i) amended the limitation on indebtedness of, and guaranteed by, our subsidiaries to the greater of (x) $800.0 million and (y) 50% of Adjusted EBITDA (as defined in the 2013 Term Loan) on a consolidated basis as of the last day of the most recently completed fiscal quarter and (ii) permitted indebtedness owed by certain of our subsidiaries to our joint venture partners.

The 2013 Term Loan matures on January 3, 2019, and the current margin over LIBOR is 1.250%.

2014 Credit Facility. On September 19, 2014, we entered into the 2014 Credit Facility, which amended and restated the 2012 Credit Facility to, among other things, (i) increase the commitments thereunder to $1.5 billion, including a $50.0 million sublimit for swingline loans and a $200.0 million sublimit for letters of credit, (ii) extend the maturity date to January 31, 2020, including up to two optional renewal periods, (iii) amend the limitation on indebtedness of, and guaranteed by, our subsidiaries to the greater of (x) $800.0 million and (y) 50% of Adjusted EBITDA (as defined in the 2014 Credit Facility) on a consolidated basis as of the last day of the most recently completed fiscal quarter, (iv) permit indebtedness owed by certain of our subsidiaries to our joint venture partners and (v) add an expansion feature, which allows us to request up to an aggregate of $500.0 million in additional commitments upon satisfaction of certain conditions.

Amounts borrowed under the 2014 Credit Facility will bear interest, at our option, at a margin above LIBOR or the Base Rate. For LIBOR based borrowings, interest rates will range from 1.125% to 2.000% above LIBOR. For Base Rate borrowings, interest rates will range from 0.125% to 1.000% above the Base Rate. In each case, the applicable margin is based upon our debt ratings. In addition, the 2014 Credit Facility requires a quarterly commitment fee on the undrawn portion of the commitments ranging from 0.125% to 0.400% per annum, based upon our debt ratings. The current margin over LIBOR that we incur on borrowings is 1.250%, and the current commitment fee on the undrawn portion of the commitments is 0.150%. The 2014 Credit Facility does not require amortization of principal and may be paid prior to maturity in whole or in part at our option without penalty or premium.

The loan agreement contains certain reporting, information, financial and operating covenants and other restrictions (including limitations on additional debt, guaranties, sales of assets and liens) with which we must comply. Any failure to comply with the financial and operating covenants of the loan agreement would not only prevent us from being able to borrow additional funds, but would constitute a default, which could result in, among other things, the amounts outstanding, including all accrued interest and unpaid fees, becoming immediately due and payable.

During the year ended December 31, 2014, we borrowed $1.3 billion and repaid an aggregate of $263.0 million of revolving indebtedness under the 2014 Credit Facility. As of December 31, 2014, we had $1.1 billion

outstanding and approximately $8.0 million of undrawn letters of credit. We maintain the ability to draw down and repay amounts under the 2014 Credit Facility in the ordinary course.

Amendments to Bank Facilities. On February 5, 2015 and February 20, 2015, we entered into amendment agreements with respect to the 2013 Term Loan, the 2013 Credit Facility and the 2014 Credit Facility. After giving effect to these amendments, our permitted ratio of Total Debt to Adjusted EBITDA (as defined in the loan agreements for each of the facilities) is (i) 6.00 to 1.00 for the fiscal quarters ended December 31, 2014 through the end of the fiscal quarter ending immediately prior to the closing of the Proposed Verizon Transaction, (ii) 7.25 to 1.00 for the first and second fiscal quarters ending on or after the closing of the Proposed Verizon Transaction, (iii) 7.00 to 1.00 for the two subsequent fiscal quarters and (iii) 6.00 to 1.00 thereafter. In addition, the maximum Incremental Term Loan Commitments (as defined in the agreement governing the 2013 Term Loan) was increased to $1.0 billion and the maximum Revolving Loan Commitments, after giving effect to any Incremental Commitments (each as defined in the loan agreements for each of the revolving credit facilities) was increased to $3.5 billion and $2.5 billion under the 2013 Credit Facility and the 2014 Credit Facility, respectively. Effective February 20, 2015, we received incremental commitments for an additional $500.0 million under each of the 2013 Term Loan and 2014 Credit Facility and $750.0 million under the 2013 Credit Facility. As a result, we have $2.0 billion outstanding under the 2013 Term Loan and may borrow up to $2.0 billion and $2.75 billion under the 2014 Credit Facility and the 2013 Credit Facility, respectively.

Bridge Facility. In connection with the signing of a definitive agreement for the Proposed Verizon Transaction, we entered into a commitment letter (the “Commitment Letter”), dated February 5, 2015, with Goldman Sachs Bank USA and Goldman Sachs Lending Partners LLC (collectively, the “Commitment Parties”), pursuant to which the Commitment Parties have committed to provide up to $5.05 billion in bridge loans (the “Bridge Loan Commitment”) to ensure financing for the Proposed Verizon Transaction. Effective February 20, 2015, the Bridge Loan Commitment was reduced to $3.3 billion as a result of an aggregate of $1.75 billion of additional committed amounts under our existing bank facilities, as described above.

The Commitment Letter contains, and the credit agreement in respect of the Bridge Loan Commitment, if any, will contain, certain customary conditions to funding, including, without limitation, (i) no material adverse effect with respect to Verizon’s land interests, towers, certain related improvements and tower related assets associated with each communications site having occurred since December 31, 2014, (ii) the execution and delivery of definitive financing agreements for the Bridge Loan Commitment and (iii) other customary closing conditions set forth in the Commitment Letter. We will pay certain customary commitment fees and, in the event we make any borrowings, funding and other fees in connection with the Bridge Loan Commitment.

Senior Notes Offerings

3.40% Senior Notes and 5.00% Senior Notes Offering. On January 10, 2014, we completed a registered public offering of reopened 3.40% Notes and reopened 5.00% Notes in aggregate principal amounts of $250.0 million and $500.0 million, respectively. The net proceeds from the offering were approximately $763.8 million, after deducting commissions and estimated expenses. As a result, the aggregate outstanding principal amount of each of the 3.40% Notes and the 5.00% Notes is $1.0 billion. We used a portion of the proceeds, together with cash on hand, to repay $88.0 million of outstanding indebtedness under the 2014 Credit Facility and $710.0 million of outstanding indebtedness under the 2013 Credit Facility.

The reopened 3.40% Notes issued on January 10, 2014 have identical terms as, are fungible with and are part of a single series of senior debt securities with the 3.40% Notes issued on August 19, 2013. The reopened 5.00% Notes issued on January 10, 2014 have identical terms as, are fungible with and are part of a single series of senior debt securities with the 5.00% Notes issued on August 19, 2013. The 3.40% Notes mature on February 15, 2019 and bear interest at a rate of 3.40% per annum. The 5.00% Notes mature on February 15, 2024 and bear interest at a rate of 5.00% per annum. Accrued and unpaid interest on the 3.40% Notes and the 5.00% Notes is payable in U.S. Dollars semi-annually in arrears on February 15 and August 15 of each year, beginning

on February 15, 2014. Interest on the 3.40% Notes and the 5.00% Notes accrues from August 19, 2013 and is computed on the basis of a 360-day year comprised of twelve 30-day months.

3.450% Senior Notes Offering. On August 7, 2014, we completed a registered public offering of the 3.450% Notes, in an aggregate principal amount of $650.0 million. The net proceeds from the offering were approximately $641.1 million, after deducting commissions and estimated expenses. We used the proceeds to repay existing indebtedness under the 2013 Credit Facility.

The 3.450% Notes mature on September 15, 2021 and bear interest at a rate of 3.450% per annum. Accrued and unpaid interest on the 3.450% Notes is payable in U.S. Dollars semi-annually in arrears on March 15 and September 15 of each year, beginning on March 15, 2015. Interest on the 3.450% Notes accrues from August 7, 2014 and is computed on the basis of a 360-day year comprised of twelve 30-day months.

We may redeem the 3.40% Notes, the 5.00% Notes and the 3.450% Notes at any time at a redemption price equal to 100% of the principal amount of such notes, plus a make-whole premium, together with accrued interest to the redemption date. If we undergo a change of control and ratings decline, each as defined in the applicable supplemental indenture governing such notes, we may be required to repurchase all of the 3.40% Notes, the 5.00% Notes or the 3.450% Notes at a purchase price equal to 101% of the principal amount of such notes, plus accrued and unpaid interest (including additional interest, if any), up to but not including the repurchase date. The 3.40% Notes, the 5.00% Notes and the 3.450% Notes rank equally with all of our other senior unsecured debt and are structurally subordinated to all existing and future indebtedness and other obligations of our subsidiaries.

Each of the applicable supplemental indentures for the 3.40% Notes, the 5.00% Notes and the 3.450% Notes contain certain covenants that restrict our ability to merge, consolidate or sell assets and its (together with our subsidiaries’) ability to incur liens. These covenants are subject to a number of exceptions, including that we and our subsidiaries may incur certain liens on assets, mortgages or other liens securing indebtedness, if the aggregate amount of such liens shall not exceed 3.5x Adjusted EBITDA, as defined in each of the supplemental indentures.

Redemption of 4.625% Senior Notes. On February 11, 2015, we redeemed all of the outstanding 4.625% senior notes due 2015 (the “4.625% Notes”). In accordance with the redemption provisions and the indenture for the 4.625% Notes, the 4.625% Notes were redeemed at a price equal to 100.5898% of the principal amount, plus accrued and unpaid interest up to, but excluding, February 11, 2015, for an aggregate purchase price of $613.6 million, including approximately $10.0 million of accrued and unpaid interest, which was funded with borrowings under the 2013 Credit Facility. Upon completion of this redemption, none of the 4.625% Notes remained outstanding.

Stock Repurchase Program. In March 2011, our Board of Directors approved a stock repurchase program, pursuant to which we are authorized to purchase up to $1.5 billion of common stock (the “2011 Buyback”). In September 2013, we temporarily suspended repurchases in connection with our acquisition of MIPT.

Sales of Equity Securities. We receive proceeds from sales of our equity securities pursuant to our employee stock purchase plan and upon exercise of stock options granted under our equity incentive plans. For the year ended December 31, 2014, we received an aggregate of $62.3 million in proceeds upon exercises of stock options and from our employee stock purchase plan.

Distributions. As a REIT, we must annually distribute to our stockholders an amount equal to at least 90% of our REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). Generally, we have distributed, and expect to continue to distribute all or substantially all of our REIT taxable income after taking into consideration our utilization of NOLs. Since our conversion to a REIT in 2012, we have distributed an aggregate of approximately $1.3 billion to our common stockholders, which is primarily taxed as ordinary income.

During the year ended December 31, 2014, we declared an aggregate of $554.6 million in regular cash distributions to our common stockholders, which included our fourth quarter distribution of $0.38 per share (approximately $150.7 million) payable on January 13, 2015 to common stockholders of record at the close of business on December 16, 2014. During the year ended December 31, 2014, we declared an aggregate of $23.9 million in cash distributions to our preferred stockholders, which included a dividend of $1.3125 per share (approximately $7.9 million), payable on February 16, 2015 to preferred stockholders of record at the close of business on February 1, 2015.

We accrue distributions on unvested restricted stock unit awards granted subsequent to January 1, 2012, which are payable upon vesting. As of December 31, 2014, the amount accrued for distributions payable related to unvested restricted stock units was $3.4 million. During the year ended December 31, 2014, we paid $0.7 million of distributions upon the vesting of restricted stock units.

For more details on the regular cash distributions paid to our common stockholders during the year ended December 31, 2014, see note 16 to our consolidated financial statements included in this Annual Report.

Contractual Obligations. The following table summarizes our contractual obligations as of December 31, 2014 (in thousands):


Contractual Obligations	2015		2016		2017		2018		2019		Thereafter		Total
Long-term debt, including current portion:
American Tower subsidiary debt:
Secured Tower Revenue Securities, Series 2013-1A(1)	$	—	$	—	$	—	$	500,000	$	—	$	—	$	500,000
Secured Tower Revenue Securities, Series 2013-2A(2)		—		—		—		—		—		1,300,000		1,300,000
GTP Notes(3)		4,935		720,640		93,503		245,000		172,987		—		1,237,065
BR Towers Debentures(4)		5,623		8,026		9,904		11,428		15,978		67,728		118,687
BR Towers Credit Facility(4)		1,198		2,874		2,874		2,874		2,874		3,695		16,389
Unison Notes, Series 2010-1 Class C, Series 2010-2 Class C and Series 2010-2 Class F notes(5)		—		—		67,000		—		—		129,000		196,000
Mexican loan(6)		263,426		—		—		—		—		—		263,426
South African Facility(7)		9,448		13,145		14,788		15,610		17,253		4,889		75,133
Colombian Credit Facility(8)		4,180		8,360		12,539		12,539		12,539		33,439		83,596
Shareholder Loans(9)		—		—		—		—		137,655		—		137,655

Total American Tower subsidiary debt		288,810		753,045		200,608		787,451		359,286		1,538,751		3,927,951

American Tower Corporation debt:
2013 Credit Facility		—		—		—		—		—		—		—
2013 Term Loan		—		—		—		—		1,500,000		—		1,500,000
2014 Credit Facility		—		—		—		—		—		1,100,000		1,100,000
4.625% senior notes(10)		600,000		—		—		—		—		—		600,000
7.00% senior notes		—		—		500,000		—		—		—		500,000
4.50% senior notes		—		—		—		1,000,000		—		—		1,000,000
3.40% senior notes		—		—		—		—		1,000,000		—		1,000,000
7.25% senior notes		—		—		—		—		300,000		—		300,000
5.05% senior notes		—		—		—		—		—		700,000		700,000
3.450% senior notes		—		—		—		—		—		650,000		650,000
5.90% senior notes		—		—		—		—		—		500,000		500,000
4.70% senior notes		—		—		—		—		—		700,000		700,000
3.50% senior notes		—		—		—		—		—		1,000,000		1,000,000
5.00% senior notes		—		—		—		—		—		1,000,000		1,000,000

Total American Tower Corporation debt		600,000		—		500,000		1,000,000		2,800,000		5,650,000		10,550,000


Contractual Obligations	2015		2016		2017		2018		2019		Thereafter		Total
Long-term obligations, excluding capital leases		888,810		753,045		700,608		1,787,451		3,159,286		7,188,751		14,477,951
Cash interest expense		550,000		517,000		485,000		399,000		315,000		654,000		2,920,000
Capital lease payments (including interest)		15,589		14,049		12,905		12,456		10,760		173,313		239,072

Total debt service obligations		1,454,399		1,284,094		1,198,513		2,198,907		3,485,046		8,016,064		17,637,023

Operating lease payments(11)		574,438		553,864		538,405		519,034		502,847		4,214,600		6,903,188
Other non-current liabilities(12)(13)		11,082		20,480		5,705		13,911		4,186		1,860,071		1,915,435

Total	$	2,039,919	$	1,858,438	$	1,742,623	$	2,731,852	$	3,992,079	$	14,090,735	$	26,455,646

(1)	Represents anticipated repayment date; final legal maturity date is March 15, 2043.

(2)	Represents anticipated repayment date; final legal maturity date is March 15, 2048.

(3)	In connection with our acquisition of MIPT on October 1, 2013, we assumed approximately $1.49 billion aggregate principal amount of secured notes, $250.0 million of which we repaid in August 2014. The GTP Notes have anticipated repayment dates beginning June 15, 2016.

(4)	Assumed in connection with our acquisition of BR Towers and denominated in BRL. The BR Towers Debenture amortizes through October 2023. The BR Towers Credit Facility amortizes through January 15, 2022.

(5)	Assumed by us in connection with the Unison Acquisition, and have anticipated repayment dates of April 15, 2017, April 15, 2020 and April 15, 2020, respectively, and a final maturity date of April 15, 2040.

(6)	Denominated in MXN.

(7)	Denominated in ZAR and amortizes through March 31, 2020.

(8)	Denominated in COP and amortizes through April 24, 2021.

(9)	Reflects balances owed to our joint venture partners in Ghana and Uganda. The Ghana loan is denominated in GHS and the Uganda loan is denominated in USD.

(10)	On February 11, 2015, we redeemed all of the outstanding 4.625% Notes in accordance with the terms thereof.

(11)	Includes payments under non-cancellable initial terms, as well as payments for certain renewal periods at our option, which we expect to renew because failure to renew could result in a loss of the applicable communications sites and related revenues from tenant leases.

(12)

Primarily represents our asset retirement obligations and excludes certain other non-current liabilities included in our consolidated balance sheet, primarily our straight-line rent liability for which cash payments are included in operating lease payments and unearned revenue that is not payable in cash.

(13)

Excludes $26.6 million of liabilities for unrecognized tax positions and $24.9 million of accrued income tax related interest and penalties included in our consolidated balance sheet as we are uncertain as to when and if the amounts may be settled. Settlement of such amounts could require the use of cash flows generated from operations. We expect the unrecognized tax benefits to change over the next 12 months if certain tax matters ultimately settle with the applicable taxing jurisdiction during this timeframe. However, based on the status of these items and the amount of uncertainty associated with the outcome and timing of audit settlements, we are currently unable to estimate the impact of the amount of such changes, if any, to previously recorded uncertain tax positions.

Off-Balance Sheet Arrangements. We have no material off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Interest Rate Swap Agreements. We have entered into interest rate swap agreements to manage our exposure to variability in interest rates on debt in Colombia and South Africa. All of our interest rate swap agreements have been designated as cash flow hedges and have an aggregate notional amount of $79.9 million, interest rates ranging from 5.74% to 7.83% and expiration dates through April 2021. In February 2014, we repaid the Costa Rica Loan and subsequently terminated the associated interest rate swap agreements. Additionally, in connection with entering into the Colombian Credit Facility in October 2014, we terminated our pre-existing interest rate

swap agreement and entered into a new interest rate swap agreement with an aggregate notional value of 100.0 billion COP (approximately $41.8 million).

Factors Affecting Sources of Liquidity

Our liquidity is dependent on our ability to generate cash flow from operating activities, borrow funds under our credit facilities and maintain compliance with the contractual agreements governing our indebtedness. We believe that the debt agreements discussed below represent our material debt agreements that contain covenants, our compliance with which would be material to an investor’s understanding of our financial results and the impact of those results on our liquidity.

Internally Generated Funds. Because the majority of our tenant leases are multi-year contracts, a significant majority of the revenues generated by our rental and management operations as of the end of 2014 is recurring revenue that we should continue to receive in future periods. Accordingly, a key factor affecting our ability to generate cash flow from operating activities is to maintain this recurring revenue and to convert it into operating profit by minimizing operating costs and fully achieving our operating efficiencies. In addition, our ability to increase cash flow from operating activities is dependent upon the demand for our communications sites and our related services and our ability to increase the utilization of our existing communications sites.

Restrictions Under Loan Agreements Relating to Our Credit Facilities. The loan agreements for the 2014 Credit Facility, the 2013 Credit Facility and the 2013 Term Loan contain certain financial and operating covenants and other restrictions applicable to us and our subsidiaries that are not designated as unrestricted subsidiaries on a consolidated basis. These include limitations on additional debt, distributions and dividends, guaranties, sales of assets and liens. The loan agreements also contain covenants that establish three financial tests with which we and our restricted subsidiaries must comply related to (i) total leverage, (ii) senior secured leverage and (iii) interest coverage, as set forth below. As of December 31, 2014, we were in compliance with each of these covenants.

Consolidated Total Leverage Ratio: This ratio requires that we not exceed a ratio of Total Debt to Adjusted EBITDA (each as defined in the loan agreements) of 6.00 to 1.00. Based on our financial performance for the twelve months ended December 31, 2014, we could incur approximately $1.7 billion of additional indebtedness and still remain in compliance with this ratio. In addition, if we maintain our existing debt levels and our expenses do not change materially from current levels, our revenues could decrease by approximately $291 million and we would still remain in compliance with this ratio. On February 20, 2015, we entered into amendments to the 2013 Term Loan, 2013 Credit Facility and 2014 Credit Facility, pursuant to which this ratio will be increased upon the closing of the Proposed Verizon Transaction.

Consolidated Senior Secured Leverage Ratio: This ratio requires that we not exceed a ratio of Senior Secured Debt to Adjusted EBITDA (each as defined in the loan agreements) of 3.00 to 1.00. Based on our financial performance for the twelve months ended December 31, 2014, we could incur approximately $4.5 billion of additional Senior Secured Debt and still remain in compliance with the current ratio (effectively, however, this ratio would be limited to $1.7 billion to remain in compliance with other covenants). In addition, if we maintain our existing Senior Secured Debt levels and our expenses do not change materially from current levels, our revenues could decrease by approximately $1.5 billion and we would still remain in compliance with the current ratio.

Interest Coverage Ratio: In the event our debt ratings fall below investment grade, we will be required to maintain a ratio of Adjusted EBITDA to Interest Expense (each as defined in the loan agreements) of not less than 2.50 to 1.00. Based on our financial performance for the twelve months ended December 31, 2014, our interest expense, which was $549 million for that period, could increase by approximately $532 million and we would still remain in compliance with this ratio. In addition, if our expenses do not change materially from current levels, our revenues could decrease by approximately $1.3 billion and we would still remain in compliance with this ratio.

The loan agreements for our credit facilities also contain reporting and information covenants that require us to provide financial and operating information within certain time periods. If we are unable to provide the required information on a timely basis, we would be in breach of these covenants.

Any failure to comply with the financial maintenance tests and operating covenants of the loan agreements for our credit facilities would not only prevent us from being able to borrow additional funds under these credit facilities, but would constitute a default under these credit facilities, which could result in, among other things, the amounts outstanding, including all accrued interest and unpaid fees, becoming immediately due and payable. If this were to occur, we may not have sufficient cash on hand to repay such indebtedness. The key factors affecting our ability to comply with the debt covenants described above are our financial performance relative to the financial maintenance tests defined in the loan agreements for these credit facilities and our ability to fund our debt service obligations. Based upon our current expectations, we believe our operating results during the next twelve months will be sufficient to comply with these covenants.

Restrictions Under Agreements Relating to the Securitization and the GTP Notes. The First Amended and Restated Loan and Security Agreement related to the Securitization (the “Loan Agreement”) and indentures governing the GTP Notes (the “GTP Indentures”) include certain financial ratios and operating covenants and other restrictions customary for transactions subject to rated securitizations. Among other things, American Tower Asset Sub, LLC and American Tower Asset Sub II, LLC (the “Borrowers”), and the GTP Issuers are prohibited from incurring other indebtedness for borrowed money or further encumbering their assets subject to customary carve-outs for ordinary course trade payables and permitted encumbrances (as defined in the Loan Agreement or the applicable GTP Indenture).

Under the terms of the agreements, amounts due will be paid from the cash flows generated by the assets securing the nonrecourse loan relating to the Securitization (the “Loan”) or the GTP Notes (as applicable), which must be deposited, and thereafter distributed, solely pursuant to the terms of the applicable agreement. On a monthly basis, after payment of all required amounts under the applicable agreement, the excess cash flows generated from the operation of the assets securing the Loan or the GTP Notes are released to the Borrowers or the applicable GTP Issuer, which can then be distributed to, and used by, us. During the year ended December 31, 2014, the Borrowers distributed excess cash to us of $715.7 million and the GTP Issuers have distributed excess cash to us of $164.1 million.

In order to distribute this excess cash flow to us, the Borrowers and the GTP Issuers must maintain a specified debt service coverage ratio (“DSCR”), calculated as the ratio of the net cash flow (as defined in the Loan Agreement or the applicable GTP Indenture) to the amount of interest required to be paid over the succeeding twelve months on the principal amount of the Loan or the principal amount of the GTP Notes that will be outstanding on the payment date following such date of determination, plus the amounts payable for trustee and servicing fees. If the DSCR with respect to the Secured Tower Revenue Securities, Series 2013-1A and Series 2013-2A issued in our Securitization (the “Securities”) or any series of GTP Notes issued by GTP Partners is equal to or below 1.30x (the “Cash Trap DSCR”) at the end of any calendar quarter and it continues for two consecutive calendar quarters, or if the DSCR with respect to any series of GTP Notes issued by GTP Cellular Sites is equal to or below the Cash Trap DSCR at the end of any calendar month and it continues for two consecutive calendar months, then all cash flow in excess of amounts required to make debt service payments, fund required reserves, pay management fees and budgeted operating expenses and make other payments required with respect to the particular series of Securities or GTP Notes under the Loan Agreement or GTP Indentures, as applicable, will be deposited into reserve accounts instead of being released to the Borrowers or the GTP Issuers. The funds in the reserve accounts will not be released to the Borrowers or GTP Partners for distribution to us unless the DSCR with respect to such series of Securities or GTP Notes exceeds the Cash Trap DSCR for two consecutive calendar quarters. Likewise, the funds in the reserve account will not be released to GTP Cellular Sites for distribution to us unless the DSCR with respect to such series of GTP Notes exceeds the Cash Trap DSCR for two consecutive calendar months.

Additionally, an “amortization period,” commences as of the end of any calendar quarter with respect to the Securities and the series of GTP Notes issued by GTP Partners, and as of the end of any calendar month with respect to the series of GTP Notes issued by GTP Cellular Sites, if the DSCR of such series equals or falls below 1.15x (the “Minimum DSCR”). The “amortization period” will continue to exist until the end of any calendar quarter with respect to the Securities and the series of GTP Notes issued by GTP Partners for which the DSCR exceeds the Minimum DSCR for two consecutive calendar quarters. Similarly, the “amortization period” will continue to exist until the end of any calendar month with respect to the series of GTP Notes issued by GTP Cellular Sites, for which the DSCR exceeds the Minimum DSCR for two consecutive calendar months.

If on the anticipated repayment date, the outstanding principal amount with respect to any series of the GTP Notes or the component of the Loan corresponding to the applicable subclass of the Securities has not been paid in full, an “amortization period” will continue until such principal amount of the applicable series of GTP Notes or the component of the Loan corresponding to the applicable subclass of Securities is repaid in full.

During an amortization period, all excess cash flow and any amounts then in the reserve accounts because the Cash Trap DSCR was not met would be applied to pay principal of the applicable subclass of Securities or series of GTP Notes on each monthly payment date, and so would not be available for distribution to us. Further, additional interest will begin to accrue with respect to any subclass of the Securities or series of GTP Notes from and after the anticipated repayment date at a per annum rate determined in accordance with the Loan Agreement or the GTP Indentures, as applicable.

Consequently, a failure to meet the noted DSCR tests could prevent the Borrowers or GTP Issuers from distributing excess cash flow to us, which could affect our ability to fund our capital expenditures, including tower construction and acquisitions, meet REIT distribution requirements, make Mandatory Convertible Preferred Stock dividend payments and fund our stock repurchase program. If the Borrowers were to default on the Loan, the trustee could seek to foreclose upon or otherwise convert the ownership of the 5,195 wireless and broadcast communications towers that secure the Loan (the “Secured Towers”), in which case we could lose the Secured Towers and the revenue associated with those towers. In addition, upon occurrence and during an event of default, the trustee may, in its discretion or at direction of holders of more than 50% of the aggregate outstanding principal of any series of GTP Notes, declare such series of GTP Notes immediately due and payable, in which case any excess cash flow would need to be used to pay holders of such GTP Notes. Furthermore, if the GTP Issuers were to default on a series of the GTP Notes, the trustee may demand, collect, take possession of, receive, settle, compromise, adjust, sue for, foreclose or realize upon all or any portion of the 2,845 towers and 1,035 property interests and other related assets that secure the GTP Notes (the “GTP Secured Sites”) securing such series of the GTP Notes, in which case we could lose the GTP Secured Sites and the revenue associated with those assets.

As of December 31, 2014, the Borrowers’ DSCR was 10.22x. Based on the Borrowers’ net cash flow for the calendar quarter ended December 31, 2014 and the amount of interest, servicing fees and trustee fees payable over the succeeding twelve months on the Loan, the Borrowers could endure a reduction of approximately $428.6 million in net cash flow before triggering the Cash Trap DSCR, and approximately $435.8 million in net cash flow before triggering the Minimum DSCR. As of December 31, 2014, the DSCR of GTP Partners and GTP Cellular Sites were 2.88x and 2.54x, respectively. Based on the net cash flow of GTP Partners and GTP Cellular Sites for the calendar quarter ended December 31, 2014 and the amount of interest, servicing fees and trustee fees payable over the succeeding twelve months on the applicable series of GTP Notes, GTP Partners and GTP Cellular Sites could endure a reduction of approximately $68.7 million and $16.4 million, respectively, in net cash flow before triggering the Cash Trap DSCR, and approximately $75.2 million and $18.4 million, respectively, in net cash flow before triggering the Minimum DSCR.

As discussed above, we use our available liquidity and seek new sources of liquidity to refinance and repurchase our outstanding indebtedness. In addition, in order to fund capital expenditures, future growth and expansion initiatives and satisfy our REIT distribution requirements, we may need to raise additional capital

through financing activities. If we determine that it is desirable or necessary to raise additional capital, we may be unable to do so, or such additional financing may be prohibitively expensive or restricted by the terms of our outstanding indebtedness. If we are unable to raise capital when our needs arise, we may not be able to fund capital expenditures, future growth and expansion initiatives, satisfy our REIT distribution requirements, pay Mandatory Convertible Preferred Stock dividends or refinance our existing indebtedness.

In addition, our liquidity depends on our ability to generate cash flow from operating activities. As set forth under Item 1A of this Annual Report under the caption “Risk Factors,” we derive a substantial portion of our revenues from a small number of tenants and, consequently, a failure by a significant tenant to perform its contractual obligations to us could adversely affect our cash flow and liquidity.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as related disclosures of contingent assets and liabilities. We evaluate our policies and estimates on an ongoing basis. Management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We have reviewed our policies and estimates to determine our critical accounting policies for the year ended December 31, 2014. We have identified the following policies as critical to an understanding of our results of operations and financial condition. This is not a comprehensive list of our accounting policies. See note 1 to our consolidated financial statements included in this Annual Report for a summary of our significant accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP, with no need for management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result.

•

Impairment of Assets—Assets Subject to Depreciation and Amortization: We review long-lived assets for impairment at least annually or whenever events, changes in circumstances or other indicators or evidence indicate that the carrying amount of our assets may not be recoverable.

We review our tower portfolio and network location intangible assets for indicators of impairment at the lowest level of identifiable cash flows, typically at an individual tower basis. Possible indicators include a tower not having current tenant leases or having expenses in excess of revenues. A cash flow modeling approach is utilized to assess recoverability and incorporates, among other items, the tower location, the tower location demographics, the timing of additions of new tenants, lease rates and estimated length of tenancy and ongoing cash requirements.

We review our customer-related intangible assets on a customer by customer basis for indicators of impairment, such as high levels of turnover or attrition, non-renewal of a significant number of contracts, or the cancellation or termination of a relationship. We assess recoverability by determining whether the carrying amount of the customer-related intangible assets will be recovered through projected undiscounted cash flows.

If the sum of the estimated undiscounted future cash flows of our long-lived assets is less than the carrying amount of the assets, an impairment loss may be recognized. An impairment loss would be based on the fair value of the asset, which is based on an estimate of discounted future cash flows to be provided from the asset. We record any related impairment charge in the period in which we identify such impairment.

•

Impairment of Assets—Goodwill: We review goodwill for impairment at least annually (as of December 31) or whenever events or circumstances indicate the carrying amount of an asset may not be recoverable.

Goodwill is recorded in the applicable segment and assessed for impairment at the reporting unit level. We utilize the two step impairment test when testing goodwill for impairment and we employ a discounted cash flow analysis. The key assumptions utilized in the discounted cash flow analysis include current operating performance, terminal sales growth rate, management’s expectations of future operating results and cash requirements, the current weighted average cost of capital and an expected tax rate. Under the first step of this test, we compare the fair value of the reporting unit, as calculated under an income approach using future discounted cash flows, to the carrying amount of the applicable reporting unit. If the carrying amount exceeds the fair value, we conduct the second step of this test, in which the implied fair value of the applicable reporting unit’s goodwill is compared to the carrying amount of that goodwill. If the carrying amount of goodwill exceeds its implied fair value, an impairment loss would be recognized for the amount of the excess.

During the year ended December 31, 2014, no potential impairment was identified under the first step of the test. The fair value of each of our reporting units was in excess of its carrying amount by a substantial margin.

•

Asset Retirement Obligations: When required, we recognize the fair value of obligations to remove our tower assets and remediate the leased land upon which certain of our tower assets are located. Generally, the associated retirement costs are capitalized as part of the carrying amount of the related tower assets and depreciated over their estimated useful lives and the liability is accreted through the obligation’s estimated settlement date.

We updated our assumptions used in estimating our aggregate asset retirement obligation, which resulted in a net increase in the estimated obligation of $13.2 million during the year ended December 31, 2014. The change in 2014 primarily resulted from changes in timing of certain settlement date and cost assumptions. Fair value estimates of liabilities for asset retirement obligations generally involve discounting of estimated future cash flows. Periodic accretion of such liabilities due to the passage of time is included in Depreciation, amortization and accretion in the consolidated statements of operations. The significant assumptions used in estimating our aggregate asset retirement obligation are: timing of tower removals; cost of tower removals; timing and number of land lease renewals; expected inflation rates; and credit-adjusted risk-free interest rates that approximate our incremental borrowing rate. While we feel the assumptions are appropriate, there can be no assurances that actual costs and the probability of incurring obligations will not differ from these estimates. We will continue to review these assumptions periodically and we may need to adjust them as necessary.

•

Acquisitions: For those acquisitions that meet the definition of a business combination, we apply the acquisition method of accounting where assets acquired and liabilities assumed are recorded at fair value at the date of each acquisition, and the results of operations are included with those of the Company from the dates of the respective acquisitions. Any excess of the purchase price paid over the amounts recognized for assets acquired and liabilities assumed is recorded as goodwill. We continue to evaluate acquisitions for a period not to exceed one year after the applicable acquisition date of each transaction to determine whether any additional adjustments are needed to the allocation of the purchase price paid for the assets acquired and liabilities assumed. The fair value of the assets acquired and liabilities assumed is typically determined by using either estimates of replacement costs or discounted cash flow valuation methods. When determining the fair value of tangible assets acquired, we must estimate the cost to replace the asset with a new asset taking into consideration such factors as age, condition and the economic useful life of the asset. When determining the fair value of intangible assets acquired, we must estimate the applicable discount rate and the timing and amount of future customer cash flows, including rate and terms of renewal and attrition.

•

Revenue Recognition: Our revenue from leasing arrangements, including fixed escalation clauses present in non-cancellable lease arrangements, is reported on a straight-line basis over the term of the respective leases when collectibility is reasonably assured. Escalation clauses tied to the Consumer Price Index or other inflation-based indices, and other incentives present in lease agreements with our

tenants are excluded from the straight-line calculation. Total rental and management straight-line revenues for the years ended December 31, 2014, 2013 and 2012 approximated $123.7 million, $147.7 million and $165.8 million, respectively. Amounts billed upfront in connection with the execution of lease agreements are initially deferred and reflected in Unearned revenue in the accompanying consolidated balance sheets and recognized as revenue over the terms of the applicable leases. Amounts billed or received for services prior to being earned are deferred and reflected in Unearned revenue in the accompanying consolidated balance sheets until the criteria for recognition have been met.

We derive the largest portion of our revenues, corresponding trade receivables and the related deferred rent asset from a small number of tenants in the telecommunications industry, and approximately 56% of our revenues are derived from four tenants in the industry. In addition, we have concentrations of credit risk in certain geographic areas. We mitigate the concentrations of credit risk with respect to notes and trade receivables by actively monitoring the credit worthiness of our borrowers and tenants. In recognizing customer revenue we assess the collectibility of both the amounts billed and the portion recognized on a straight-line basis. This assessment takes tenant credit risk and business and industry conditions into consideration to ultimately determine the collectibility of the amounts billed. To the extent the amounts, based on management’s estimates, may not be collectible, recognition is deferred until such point as the uncertainty is resolved. Any amounts that were previously recognized as revenue and subsequently determined to be uncollectible are charged to bad debt expense. Accounts receivable are reported net of allowances for doubtful accounts related to estimated losses resulting from a tenant’s inability to make required payments and allowances for amounts invoiced whose collectibility is not reasonably assured.

•

Rent Expense: Many of the leases underlying our tower sites have fixed rent escalations, which provide for periodic increases in the amount of ground rent payable over time. In addition, certain of our tenant leases require us to exercise available renewal options pursuant to the underlying ground lease if the tenant exercises its renewal option. We calculate straight-line ground rent expense for these leases based on the fixed non-cancellable term of the underlying ground lease plus all periods, if any, for which failure to renew the lease imposes an economic penalty to us such that renewal appears to be reasonably assured.

•

Stock-Based Compensation: The stock-based compensation expense recognized over the service period, which is generally the vesting period, is required to include an estimate of the awards that will not fully vest and be forfeited. The fair value of a stock option is determined using a Black-Scholes option-pricing model that takes into account a number of assumptions at the accounting measurement date including the stock price, the exercise price, the expected life of the option, the volatility of the underlying stock, the expected distributions, and the risk-free interest rate over the expected life of the option. These assumptions are highly subjective and could significantly impact the value of the option and the compensation expense. The fair value of restricted stock units is based on the fair value of our common stock on the grant date. We recognize stock-based compensation in either selling, general, administrative and development expense, costs of operations or as part of the costs associated with the construction of our tower assets.

•

Income Taxes: Accounting for income taxes requires us to estimate the timing and impact of amounts recorded in our financial statements that may be recognized differently for tax purposes. To the extent that the timing of amounts recognized for financial reporting purposes differs from the timing of recognition for tax reporting purposes, deferred tax assets or liabilities are required to be recorded. Deferred tax assets and liabilities are measured based on the rate at which we expect these items to be reflected in our tax returns, which may differ from the current rate. We do not expect to pay federal taxes on our REIT taxable income.

We periodically review our deferred tax assets, and we record a valuation allowance if, based on the available evidence, it is more likely than not that some or all of the deferred tax assets will not be

realized. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. Valuation allowances would be reversed as a reduction to the provision for income taxes, if related deferred tax assets are deemed realizable based on changes in facts and circumstances relevant to the assets’ recoverability.

We recognize the benefit of uncertain tax positions when, in management’s judgment, it is more likely than not that positions we have taken in our tax returns will be sustained upon examination, which are measured at the largest amount that is greater than 50% likely of being realized upon settlement. We adjust our tax liabilities when our judgment changes as a result of the evaluation of new information or information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which additional information is available or the position is ultimately settled under audit.

We consider the earnings of certain non-U.S. subsidiaries to be indefinitely invested outside the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs. Should we decide to repatriate the foreign earnings, we may have to adjust the income tax provision in the period we determined that the earnings will no longer be indefinitely invested outside of the United States.

Accounting Standards Update

For a discussion of recent accounting standards updates, see note 1 to our consolidated financial statements included in this Annual Report.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The following table provides information as of December 31, 2014 about our market risk exposure associated with changing interest rates. For long-term debt obligations, the table presents principal cash flows by maturity date and average interest rates related to outstanding obligations. For interest rate swaps, the table presents notional principal amounts and weighted-average interest rates (in thousands, except percentages).


Long-Term Debt	2015			2016			2017			2018			2019			Thereafter			Total		Fair Value
Fixed Rate Debt(a)	$	614,310		$	726,994		$	667,726		$	1,751,992		$	1,547,555		$	6,047,260		$	11,355,837	$	11,827,396
Average Interest Rate(a)		4.66	%		5.03	%		6.37	%		3.44	%		5.19	%		4.30	%
Variable Rate Debt(b)	$	283,314		$	31,060		$	38,762		$	41,108		$	1,616,304		$	1,206,948		$	3,217,496	$	3,208,106
Average Interest Rate(b)(c)		5.11	%		8.87	%		8.79	%		8.76	%		1.81	%		1.98	%

Interest Rate Swaps
Notional Amount	$	6,874		$	10,837		$	13,759		$	14,175		$	15,007		$	19,226		$	79,878	$	(559	)
Fixed Rate Debt Rate(d)																						10.25	%

(a)

Fixed rate debt consisted of: Securities issued in the Securitization ($1.8 billion); GTP Notes, acquired in connection with our acquisition of MIPT ($1.2 billion principal amount due at maturity, the balance as of December 31, 2014 was $1.3 billion); Sublimit B under the BR Towers Credit Facility, acquired in connection with our acquisition of BR Towers (the balance as of December 31, 2014 was $8.7 million); Unison Notes acquired in connection with the Unison Acquisition ($196.0 million principal amount due at maturity, the balance as of December 31, 2014 was $203.7 million); the 4.625% Notes (the balance as of December 31, 2014 was $600.0 million; we redeemed the 4.625% Notes in February 2015); the 7.00% senior notes due 2017 ($500.0 million principal due at maturity); the 4.50% senior notes due 2018 ($1.0 billion principal amount due at maturity, the balance as of December 31, 2014 was $1.0 billion); the 3.40% Notes ($1.0 billion principal amount due at maturity, the balance as of December 31, 2014 was $1.0 billion); the 7.25% senior notes due 2019 ($300.0 million principal amount due at maturity, the balance as of December 31, 2014 was $297.3 million); the 5.05% senior notes due 2020 ($700.0 million principal amount due at maturity, the balance as of December 31, 2014 was $699.5 million); the 3.450% Notes ($650.0 million principal amount due at maturity, the balance as of December 31, 2014 was $646.4 million); the 5.90% senior notes due 2021 ($500.0 million principal amount due at maturity, the balance as of December 31, 2014 was $499.5 million); the 4.70% senior notes due 2022 ($700.0 million principal amount due at maturity, the balance as of December 31, 2014 was $699.0 million); the 3.50% Notes ($1.0 billion principal amount due at maturity, the balance as of December 31, 2014 was $1.0 billion); the 5.00% Notes ($1.0 billion principal amount due at maturity, the balance as of December 31, 2014